Investment Products 

CLARIFICATION OF SCOPE

Consumer Credit, Payment Services and Electronic Money

  1. Where regulated entities are providing credit under credit agreements which fall within the scope of the European Communities (Consumer Credit Agreements) Regulations 2010 (S.I. No. 281 of 2010), the Provisions in this Chapter do not apply.
  2. Where regulated entities are providing payment services and/or issuing electronic money, only Provisions 9.1 to 9.18, 9.30 and 9.31 apply.

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INVESTMENT PRODUCTS (9.32 - 9.52)

9.32
A regulated entity must ensure that an advertisement for a product where the consumer may not get back 100% of the initial capital invested contains the following warning statement:

Warning:
If you invest in this product you may lose some or all of the money you invest.
 

9.33
A regulated entity must ensure that an advertisement for a product where the promised return of capital is only applicable on a specific date, contains the following warning statement:   

Warning:
If you cash in your investment before [specify the particular date] you may lose some or all of the money you invest.

9.34
A regulated entity must ensure that an advertisement for a product where there is no access to funds for the term of the product contains the following warning statement:

Warning:
If you invest in this product you will not have any access to your money for [insert time required before the product matures].

9.35
Where a regulated entity gives information about the past performance of the advertised product or service or of the regulated entity, this information must: 

  1. be based on a product similar to that being advertised;
  2. not be selected so as to exaggerate the success or disguise the lack of success of the advertised   product or service;
  3. state the source of the information;
  4. be based on actual performance;
  5. state clearly the period chosen, which must be related to the term of the product being advertised; 
  6. include the most recent period;
  7. indicate, where they arise, details of transaction costs, interest and taxation that have been taken into account; and
  8. state, where applicable, the basis upon which performance is quoted.


9.36
         
A regulated entity must ensure that an advertisement which contains information on past performance contains the following warning statement:

Warning:
Past performance is not a reliable guide to future performance.
 

9.37
Where a regulated entity has a position or holding in the product or service that is the subject of an advertisement by that regulated entity, it must include a statement to this effect in the advertisement.


9.38         
Where a regulated entity gives information in an advertisement about the simulated performance of the advertised product or service or of a regulated entity, this information must:

  1. be based on a simulated performance that is relevant to the performance of the advertised product or service or of the regulated entity;
  2. not be selected so as to exaggerate the success or disguise the lack of success of the advertised product or service or of the regulated entity;
  3. state the source; and
  4. indicate whether, and to what extent, transaction costs, interest and taxation have been taken into account.

9.39
A regulated entity must ensure that an advertisement which contains illustrations or information on simulated performance must also contain the following warning statement:

Warning:
These figures are estimates only.  They are not a reliable guide to the future performance of this investment.


9.40
A regulated entity must ensure that an advertisement must not describe a product as guaranteed or partially guaranteed unless:

  1. there is a legally enforceable agreement with a third party who undertakes to meet, to whatever extent is stated in the advertisement, the consumer’s claim under the guarantee;
  2. the regulated entity has made, and can demonstrate that it has made, an assessment of the value of the guarantee;
  3. it clearly states the level, nature and extent of limitations of the guarantee and the name of the guarantor; and
  4. where it is the case, the advertisement must state that the guarantee is from a connected party of the regulated entity.

9.41         
A regulated entity must ensure that where an advertisement contains a reference to the impact of taxation, it must:

  1. state the assumed rate of taxation;
  2. state, where applicable, that the tax reliefs are those currently applying, and state that the value of the tax reliefs referred to in the advertisement apply directly to the consumer, to the provider of the advertised product or service or its provider, as appropriate;
  3. state, where applicable, that the matters referred to are only relevant to a particular class or classes of consumer with particular tax liabilities, identifying the class or classes of consumer and the type of liabilities concerned;
  4. state who has the responsibility for obtaining the tax benefits advertised;
  5. not describe the advertised product or service  as being free from any liability to income tax unless equal prominence is given to a statement, where applicable, that the income is payable from a product  from which income tax has already been paid; and
  6. not describe the advertised product or service  as being free from any liability to capital taxation unless equal prominence is given to a statement, where applicable, that the value of the advertised product or service  is linked to a product  which is liable to capital taxation.

9.42         
A regulated entity must ensure that where the advertised product or service can fluctuate in price or value, an advertisement contains the following warning statement:

Warning:
The value of your investment may go down as well as up
.

9.43         
A regulated entity must ensure that where the return on an advertised product or service is not set until a particular date (for example, the maturity date of the advertised product or service), this is clearly stated.

9.44         
A regulated entity must ensure that where a product that is the subject of an advertisement is described as being likely to yield income or as being suitable for a consumer particularly seeking income, and where the income from such product can fluctuate, the advertisement contains the following warning statement:

Warning:
The income you get from this investment may go down as well as up.

9.45         
Where a product that is the subject of an advertisement offers the facility of a planned withdrawal from capital as an income equivalent, a regulated entity must ensure that the effect of the withdrawal upon such a product is clearly explained in the advertisement.

9.46         
A regulated entity must ensure that where an advertised product or service is denominated or priced in a foreign currency, or where the value of an advertised product or service may be directly affected by changes in foreign exchange rates, the advertisement contains the following warning statement:

Warning:
This [product/service] may be affected by changes in currency exchange rates.

 
  

9.47
A regulated entity must ensure that an advertisement for a product, which is not readily realisable, states that it may be difficult for consumers to sell or exit the product and/or obtain reliable information about its value or extent of the risks to which it is exposed.

9.48         
A regulated entity must ensure that an advertisement for a product that cannot be encashed prior to maturity, or which incurs an early redemption charge if encashed prior to maturity, clearly states that this is the case.

9.49         
A regulated entity must ensure that an advertisement for a product subject to front-end loading states that: 

  1. deductions for charges and expenses are not made uniformly throughout the life of the product, but are loaded onto the early period;
  2. if the consumer withdraws from the product  in the early period, the practice of front-end loading will impact on the amount of money which the consumer receives; and
  3. if applicable, that a  consumer may not get back the full amount they invested.

9.50
Where a regulated entity advertises an interest rate relating to a proportion of the tracker bond to be placed on deposit, the advertisement must also clearly state the following:

  1. whether the rate quoted is fixed or variable, and if fixed, for what period and, where relevant, an indication of the rate that will apply thereafter;
  2. the relevant compound annual rate, over the full term of the tracker bond,  applicable to the proportion of the tracker bond to be placed on deposit; and
  3. whether any tax is payable on the interest earned.

Each rate provided to a consumer under this provision must be of equal font size and prominence.

9.51
Where a regulated entity advertises a projected return on investment for a tracker bond, the regulated entity must ensure that the value of the projected return of that tracker bond is expressed and shown as prominently as the equivalent compound annual rate.

9.52         
Where a regulated entity advertises a projected return on investment for a tracker bond, where there are parts of that tracker bond invested separately, the regulated entity must ensure that the value of the return on the amount invested in each of the component parts of that tracker bond over the full term of the tracker bond is expressed and shown as prominently as the equivalent compound annual rate.