Marketing Material Guidelines and Compliance FAQ
6.
6A.
Question
regular publication?
Our firm is not eligible for taking the exemption
under the SFO and we plan to publish a print ad
in the newspaper, distribute a leaflet and put up
a poster on buses. Do we need to submit every
material for authorization if these materials
contain the same information but are of different
sizes?
Can you give some guidance to issuers of
Advertising Materials in the Product Codes
regarding the SFC's expectations on disclosure?
Answer
Provided that the content and format (including the overall proportion) remain the same, an
authorized advertisement may be used in different distribution media and published in
different sizes.
As a general principle, marketing materials issued must be clear, fair, and present a balanced
picture with adequate and prominent risk disclosure in compliance with all applicable
regulations.
The SFC expects issuers of Advertising Materials in the Product Codes to pay attention to the
following when issuing marketing materials. The following are equally applicable to offering
documents.
a.
All principal risks should be prominently disclosed. Disclosures should be:
(i) visually reader-friendly - e.g. densely packing complex and diverse information into a
lumpy paragraph would not be visually reader-friendly;
(ii) written in plain language so that investors can understand them - use of technical
jargon or complex sentences would not be plain language.
b. To ensure that the key features and risks are summarised for investors upfront, these
should be presented prominently (e.g. in a window on the front cover of an offering
document or advertising pamphlet) in a few key bullets. Crowding this upfront window
with too many bullets would be counter effective.
C.
(i) What is the product and what does it do.
(ii) What are the very key risks (e.g. that the product can invest up to a stated
percentage in financial derivative instruments, such as swaps, collateralised debt
obligations (CDOs); and any significant counterparty risks exposure etc.).
(iii) What is the worst case scenario that investors should be aware of.
Presentation of benefits, returns and risks of the product should be fair, balanced and
proportionate - presenting benefits and returns disproportionately larger than or without
mentioning the risks of the product would not be fair and proportionate.
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