4 things you need to do now about MiFID II and financial promotions

Sep 18th '17

MiFID II will have a huge impact on regulated firms when it comes into force in January 2018.


Financial promotions and marketing are two areas where it will have significant implications.


Here we look at the four things Compliance teams should do now to maximise their firms’ chances of complying.


  • How will MiFID II impact financial promotions?

The Markets in Financial Instruments Directive comes into force in January 2018.


In March 2017, the FCA published near-final details of the new regulation.


One of the areas where it will have the most impact is in financial promotions, marketing and customer communications.


  • How marketing will change under MiFID II

The directive introduces new or enhanced requirements in two main areas.


These cover:


  • the content of financial promotions and marketing material
  • the disclosure of fees and charges to clients


New requirements cover areas including:


  1. Risk warnings
  2. Prominence
  3. Future performance statements
  4. Enhanced ‘fair, clear and not misleading’ requirements


  • What four actions should Compliance teams be taking now?

With a wealth of new and enhanced requirements to meet, Compliance professionals and the wider business should start working out how they will tackle the new challenges.


The deadline is now only a few months away. Here is our four-point blueprint for MiFID II action.


1. Make a start

The directive potentially affects all your existing promotional materials.


Working out the scale of the task will involve auditing your existing literature (hard copy and online) to see which of your communications need to be updated.


Identify all your marketing materials, adverts, brochures and other financial promotions. Understanding how big a job you face will help you to allocate appropriate people, time and money to the project.


2. Make sure your approvals process is up to scratch

Using a checklist for approvals can dramatically improve your regulatory compliance. But even if you already use a checklist approach, your list will need updating to reflect the new requirements.


Review existing checklists and identify any updates that need to be made – then make them.


A compliant audit trail, detailing the sign off process, is a key component of the new directive.


Some firms find that using compliance workflow tools to automating the approval process can help to prevent regulatory breaches. You may want to explore whether automation can help you to mandate approvals processes and reduce your chances of non-compliance.


3. Get everyone in the business involved

You and your team are responsible for ensuring that anyone involved in producing promotions is aware of the upcoming changes. Particularly in professional services firms, producing financial promotions doesn’t just fall to the Marketing team. Brochures, whitepapers, online content, articles – marketing communications can be written by a range of people across the business.


Helping your Sales and Marketing colleagues to understand the requirements will enable them to write content you can approve first time – speeding the sign-off process and getting your promotions to market faster.


4. Get on top of disclosure

One of the biggest challenges for many firms will be the requirements around fees and charges disclosure. Significant amounts of data now need to be updated on a regular basis and presented accurately to stakeholders.


The directive provides no set template for displaying this information. While this gives you a certain amount of freedom to interpret the requirements, it also puts the onus on you to ensure that the data is clear, accurate and comprehensive enough to meet the FCA’s standards.


You might want to investigate the potential of online slide libraries. This approach can help by locking down approved content and automatically updating slides with the latest statistics, charts and other corporate information.


  • How will MiFID II impact your business?

Start with these four areas, and you will be making a good start on compliance with the directive.


Financial promotions, though, is just one element of your work that will be impacted by the new rules.


If you want a refresher on financial promotions compliance you can contact us.


How can we help you?          

LS Consultancy has wealth of experience in reviewing adverts and financial promotions and can do so on a one-off or on an on-going basis.


We are also skilled in reviewing and assessing your financial promotion procedures and can assist you to establish the necessary framework to help future compliance with regulatory requirements.


Explore our full range today.


Contact us


Remember: Not everything is black and white when it comes to Financial Promotions, and many of the rules are open to interpretation. If you are unsure how your activities fit within the rules, please contact us.



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