The Central Bank’s principal objective in relation to advertising is that consumers should receive balanced information which is “clear, fair, accurate and not misleading”. In the context of advertising regulated activities such as banking, investment business or insurance, it is important that regulated entities pay particular attention to the provisions of the Code dealing with general principles, general requirements and provision of information; not just the advertising-specific chapter.

Scope of advertising rules

Helpfully, the Guidance gives clarification on the Central Bank’s interpretation of the scope of “advertisement”. Broadly, it applies to any commercial communication addressed to consumers advertising the regulated entity or regulated activity, other than in very limited exceptions. For example name plaques and sponsorship material (where that material communicates the entity’s brand name as opposed to promoting a particular product/service) are excluded from the definition. The Guidance clarifies that advertising includes internet discussion sites and search engine sponsorships in addition to the more traditional TV, radio, print and outdoor advertising.

Resources, systems and control checks

Other clarifications relate to resources, systems and controls including the importance of the role of the board and the compliance officer in overseeing internal and external marketing functions to ensure that advertisements comply with the relevant requirements of the Code. The Guidance also emphasises that regulated entities are under an obligation to comply with the advertising requirements even where advertising aspects are outsourced.

Regulatory disclosure statement

The Guidance provides further clarification on the requirements regarding the location of regulatory disclosure statements on websites and reminds regulated entities that neither the Central Bank’s nor the regulated entities’ legal names may be abbreviated in regulatory disclosure statements and that all trading names should be included.

Regulatory action

Regulated entities should be aware that the Central Bank monitors advertising. In the 9 months to end-September 2013, action was taken by the Central Bank in respect of 178 advertisements. Regulatory action could range from letters directing the entity to withdraw a particular advertisement or campaign or to conduct a review of all its advertising material (with the consequent cost implications) to the potential imposition of more serious sanctions under the administrative sanctions regime.

There is also a useful checklist in the Central Bank’s Guidance of good practice tips.

Contributed by Gillian Young.

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