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Authorised Provider

A person shall not cause to be advertised, supply or offer the supply, investment or ancillary services, make any other solicitation in respect of investment or ancillary service, represent that the person is a provider of such services if the provision of such services would be in breach of MiFID.

The Central Bank may impose conditions and requirements on an investment firm or operator of a regulated market in respect of advertising as it considers necessary in the interest of orderly and properly regulating and supervising the same and protecting investors. It may impose requirements on specified firms or market operators or all authorised firms or market operators to display information at their premises and to publish specified information.

Central Bank Direction

If, in relation to an investment firm or market operator, the Central Bank considers it expedient, in the interest of the orderly regulation and supervision of firms and market operators and the protection of investors, it may give the investor firm or operator a direction as to

• the content and form of any advertisement or other means of soliciting money, financial instruments or business from potential or existing clients,
• the content and form of any advertisement relating to such service or requiring the firm or operator to withdraw an advertisement or to cease advertising.

The direction may do any of the following without limiting the above:

• prohibit the issue by the firm or regulated market of advertisements of all descriptions or of any specified description;
• require the investment firm or regulated market to modify advertisements of a specified description in a specified manner;
• prohibit the issue by the investment firm or regulated market of any advertisements which are substantially repetitions of a specified advertisement;
• require the investment firm or regulated market to withdraw any specified advertisement or advertisement of a specified description;
• require the firm or regulated market to include specified information to be published by or on behalf of it or in any statement to the public to be made on its behalf.

Consequence of Breach

In the case of an advertisement in contravention of a Regulation or a direction inviting other persons to enter or offer into investment agreements or containing information calculated to lead directly or indirectly to persons entering investment agreements, then the counterparty is not entitled to enforce the agreement to which the advertisement relates, entered after issue of the advertisement and the other person is entitled to recover any money, property or financial instruments paid or transferred under the agreement together with compensation for any loss sustained as a result of having paid the same.

If, in contravention of a direction, a person issues an advertisement inviting another to exercise rights conferred by a financial instrument or containing information calculated directly or indirectly to lead to another person so exercising the rights, then the person concerned is not entitled to enforce the obligation, to which the other person is subject, as a result of the exercise by the first person after the issue of the advertisement of any rights and the latter is entitled to recover money and property in the same way as above.

A court may allow a person to recover money, property or instruments, which would otherwise be prohibited under the above provisions, if satisfied that the person against whom enforcement is sought was not influenced or influenced to a material extent, by the advertisement or the advertisement was not misleading as to the nature of the investments and the terms of the agreement as the case may be.

Directed Correction Publication

The Central Bank may direct a person to arrange the publication of a correction to a misleading advertisement concerning services for investment firms or regulated markets. It may also direct a person to arrange the publication of a correction that contravenes the Regulation.

It may direct a person to arrange the publication of the fact that an offence has taken place and that a fine has been imposed. It may arrange for the publication of an advertisement correcting misleading advertisements published by an investment firm or regulated market.

Investment Research

Investment firms which arrange or produce investment research that is likely to be subsequently disseminated to clients of the firm or to the public, under their own responsibility or that of a member of their group, must ensure the implementation of all the measures below in relation to the financial analysts involved in the production of the investment research and other relevant persons whose business or interests may conflict with the interests of the persons to whom the research is disseminated.

Firms must have in place arrangements designed to ensure that the following conditions are satisfied: financial analysts and other relevant persons must not undertake personal transactions or trade other than as market makers acting in good faith and in the ordinary course of market making or in the execution of an unsolicited client order, on behalf of any person including the investment firm, in financial instruments to which the investment research relates or in any related financial instruments, with knowledge of the likely timing or content of that investment research which is not publicly available or available to clients and cannot readily be inferred from information that is so available until the recipients of the investment research have had a reasonable opportunity to act on it.

Interest in Investment Research

In the circumstances not covered by the above, financial analysts and other relevant persons involved in the production of investment research must not undertake any personal transactions in financial instruments to which the research relates or in any related financial instruments, contrary to current recommendations, except in exceptional circumstances and with the prior approval of a member of the firm’s legal or compliance function.

The investment firm’s analysts and other relevant persons involved in the investment research must not accept inducements from those with a material interest in the subject matter of the investment research.

The investment firm itself, financial analysts and other relevant persons involved in the production of the investment research must not promise issuers favourable research coverage; issuers, relevant persons, and other financial analysts must not, before dissemination of investment research, be allowed to review a draft of the research for the purpose of verifying the accuracy of factual statements made or for any other purpose other than verifying compliance with the firm’s legal obligation, if the draft includes a recommendation or a target price.

Exemptions

Investment firms which disseminate investment research produced by other persons to the public or to clients are exempt from the above if the following criteria are met:

• the person who produces the investment research is not a member of the group to which the investment firm belongs;
• the investment firm does not substantially alter the recommendations within the investment research;
• it does not present the investment research as having been produced by it;
• the investment firm verifies that the producer of the research is subject to requirements equivalent to those under the Regulations in relation to the production of that research or has established policies in relation to such requirements.

The restrictions on advertisements may be subject to exemptions specified by the Central Bank, which appear to have a private character whether by reason of a connection between the person issuing and the person to whom they are issued, advertisements appearing to the Central Bank to deal with investment or ancillary services only incidentally or advertisements issued to persons appearing to the Central Bank to be sufficiently expert to understand any risks involved.  The exemption may be subject to conditions specified by the Central Bank.