Added: Tonya Fagin - Date: 23.12.2021 23:18 - Views: 21206 - Clicks: 1275
Financial advertising in Canada is primarily regulated by the federal, provincial and territorial governments, which have enacted advertising laws of general and more specific application. The Competition Act is the main federal advertising law of general application, while some of the provisions of the Credit Business Practices Regulations and the Cost of Borrowing Banks Regulations under the Bank Act  govern the sector-specific advertising of financial products and services.
Financial advertising in the provinces and territories is typically governed by their respective consumer protection legislation. In addition to federal, provincial and territorial legislation, financial advertising is also governed by codes of conduct.
In recent years, financial advertising has been Financial advertising review increasing area of focus for regulatory authorities around the world. The International Financial Consumer Protection Organization aka FinCoNet  recently issued its much-anticipated report on the supervisory challenges and approaches related to financial advertising. The report is based on survey responses collected from 20  participating jurisdictions and provides analysis on how supervisors oversee financial advertising in their respective jurisdictions.
The report also explores challenges, trends, emerging issues and innovations through the analysis of the survey and the use of case studies. The report is organized in six main sections: Legal and regulatory framework, Supervisory authority and approach, Challenges in financial advertising oversight, Innovative oversight tools, Conclusions and Takeaways.
Our concluding paragraph runs through where Canada stands compared to its international peers. The regulations related to financial advertisements typically ensure that use information that is clear and easy to understand and disclose all fees, interest rates and terms.
For Financial advertising review, new legislation in Brazil, the Netherlands and Spain is broadly similar to financial advertisement legislation for traditional advertisement channels but include updated provisions that are specific to digital channels. Some of these changes require advertisements with moving images to be presented in a manner that allows viewers to read all the necessary information.
In Canadathe report refers to recent legislative changes that have included a series of high-level principles complemented by more prescriptive rules in regulations, such as those pertaining to disclosure requirements. Twenty percent of responding jurisdictions use a regulatory approach to financial advertising that is primarily rules-based, while no jurisdiction uses a principles only-based approach. Instruments — A variety of instruments are used to regulate financial advertisements.
The most popular instruments used are:. Unique combinations of oversight authorities exist, with the mandate of each authority, body, and organization also varying by jurisdiction. While some jurisdictions with multiple authorities have clear and distinct mandates, others have overlapping mandates. Existing supervisory models in responding jurisdictions include:. The precise scope of financial services market conduct authorities varies between jurisdictions. Financial services self-regulatory organization FSRO — Twenty percent of respondents mention that financial advertising is overseen by an FSRO, who rely on institutions to meet best practices.
The report provides Spain as an example. Its FRSO is limited to reviewing before publication by institutions and has no regulatory power. The Central Bank of Spain, however, can require institutions to modify or suspended even if a prior review was conducted by the FSRO.
Canada is one of those jurisdictions where financial advertisements are administered, at least in part, by a body dedicated to maintaining advertising standards and best practices. Ad Standards - Canada oversees a Code of advertising Financial advertising review directly for a broad range of consumer products, including financial services. Examples of such structures exist, for example, in Italy and Ireland. Supervisory approach - All respondents indicate that their oversight authority is triggered, at least in part, once advertisements are published.
No respondent reports a framework exclusively based on pre-authorization. That said, Japan and Mauritius report that some elements of advertising campaigns require a degree of authorization prior to being published. The report describes that Canada receives consumer complaints through its consumer contact centre and its online complaints submission process and that all federally regulated institutions are required to report consumer complaints in aggregate to the FCAC.
Enforcement tools - In terms of enforcement tools, jurisdictions report using a set of diverse tools to enforce and sanction institutions in violation. However, the findings confirm that it is difficult at this time to assess the effectiveness of these tools because of the insufficiency of data available.
indicate that respondents use a range of enforcement measures to bring institutions into compliance with financial advertising rules. Five percent of jurisdictions report using consumer focus groups to test advertising campaigns, while forty-five percent indicate that their whistleblowing program is used as a tool to oversee financial advertising as well.
Challenges in overseeing digitalized financial advertisements - Sixty-five percent of jurisdictions indicate that the digitalization of financial advertising is intensifying existing challenges related to the oversight of financial advertising by supervisors. Contributing to this intensification is the use of platforms such as social media as a means of institutions interacting with consumers and their customers. The report explains that Financial advertising review digital campaigns can be customized for a specific audience, be available for a Financial advertising review period of time, or be available only in restricted areas, this may make campaigns difficult to identify and therefore supervise.
Authorities also cite technology challenges related to the management of information technology and the requirement for specialized skills to be increasing. This includes the development of advanced monitoring systems such as SupTech solutions. The tools that have been developed thus far are aimed at improving clarity in financialproviding monitoring efficiencies and helping consumers understand the content of financial.
One jurisdiction  is currently piloting the use of Natural Language Processing NLP to monitor financial advertising. The report remarks that it will become increasingly necessary for supervisor to explore the use of supervisory technology SupTech and regulatory technology RegTech to handle the large volume of data that need to Financial advertising review captured and analyzed. The application of behavioural economics also factors in the supervisory approaches Financial advertising review are being considered by a of countries.
Products with multiple key attributes for example loans are particularly difficult for consumers to understand. Errors are often related to the context in which they are made, such that whoever determines the decision-making context usually the seller can influence the outcome of consumer decision. Full disclosure of information Financial advertising review unlikely to ensure that consumers fully understand the product they are purchasing. Consumers are influenced by the way s are presented. Monetary amounts are more easily evaluated by consumers than percentages.
Absolute s are more easily understood and could potentially present an alternative to percentages in advertisements. The report further suggests that supervisory authorities continue to explore behavioural economics as they apply to their oversight activities, specifically how it can help guide the supervision of financial advertising.
The report concludes that jurisdictions should invest in tools and continued research to Financial advertising review oversight for financial advertising and that they should also consider how new supervisory technology should be deployed to complement traditional tools to adequately respond to the rapid digitalisation of financial services. The report reaches several other interesting conclusions including that whistleblowing is now considered part of financial advertising oversight by a of jurisdictions and that some of the challenges experienced by supervisors involve the lack of monitoring capacity to address advertising volumes and keep up with new advertising media.
The report Financial advertising review a handful of key takeaways and next steps for consideration. In a nutshell, they offer that:. For example, evidence suggests that Financial advertising review mistakes are common and even well-deed disclosure of information is no guarantee that that consumers fully understand the products they are purchasing. Generally, Canada finds itself alongside the majority of the other countries surveyed in terms of legal frameworks and approaches.
And, once the new financial consumer protection framework  comes into force, it will also largely mirror their enforcement of financial advertising rules e. The challenges expressed in the report by responding authorities appear to be shared across jurisdictions, including Canada. They involve institutional misconduct, a lack of monitoring capacity, large volumes of advertising information, an increasing of dissemination channels and the rapid development of innovative advertising technologies.
These challenges precipitate the need for supervisors to recruit specialized skills and develop advanced monitoring systems capable of capturing and analyzing large amounts of data. Finally, Canada also finds itself among the majority of countries not currently using innovative SupTech tools such as artificial intelligence and natural language processing to conduct Financial advertising review activities related to financial advertising. Misleading financial information misrepresented promotions and unclear conditions of the product or service.
Information pertaining to rates associated with products advertising containing information that is not clear, simple or misleading. In Indonesia, an advertising monitoring system is regularly used to directly notify or warn financial service providers who violate regulations. They explain how the legislation, rules and guidelines should be interpreted or applied in specific situations, and, depending on the jurisdiction, may be considered strictly informational or used as an oversight tool.
Key Takeaways The report offers a handful of key takeaways and next steps for consideration. How Canada Compares Generally, Canada finds itself alongside the majority of the other countries surveyed in terms of legal frameworks and approaches. Search Close search Search Search. View more.Financial advertising review
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