Curb on chaotic marketing of financial products

Seven central government departments recently published a regulation on the marketing of financial products on the internet to solicit public opinions.

The central authorities issued a notice of the same kind two years ago, which stipulates that market entities that have not obtained corresponding financial business qualifications are not allowed to carry out marketing and publicity activities related to the financial business.

However, many financial agencies, wealth management companies and platform companies do not take the toothless regulation seriously as it falls into the everybody’s-business-is-nobody’s-business dilemma.

And with the development of the internet, the rise of new media and we media and the increasing demand of the public for investment and wealth management, new forms for the marketing of various financial products have emerged one after another. Some third-party institutions take the opportunity of marketing to recommend securities funds and wealth management products to the public in violation of regulations through one-sided exaggerated publicity or even false publicity.

The new regulation not only effectively links up with the existing regulatory system, but also puts forward specific requirements in terms of basic principles and qualification requirements and legal liability.

Notably, the regulation makes it clear that third-party internet platforms shall not abuse their dominant market position, implement discriminatory and exclusive measures against cooperative behaviors, and shall not hinder financial consumers from inquiring and handling financial business through financial institutions.

The regulation particularly emphasizes non-bank payment institutions are prohibited from marketing loans, wealth management and other financial products.

And it requires financial institutions to refrain from recommending or certifying financial products in the name or image of entertainers.

The issuing of the regulation can help maintain the financial market competition order, reduce unfair competition behavior, standardize the marketing of financial products, and promote the healthy development of large and small financial institutions.

The financial institutions should strictly follow the regulations, and strengthen their self-discipline so that they can speed up their digital transformation and better serve the real economy and the public.

The regulation will curb the chaos of the online marketing of financial products, better maintain the order of the financial market and protect the legitimate rights and interests of financial consumers.