The ESMA advises of the rules to advise investments in social networks By EFE

Paris, Oct 28 (.) .- The European Securities and Markets Authority (ESMA) issued a warning this Thursday to those who make investment recommendations on social networks to warn them that they must respect a series of specific rules, and that in failure to do so may result in fines or legal proceedings.

“If the rules regarding investment recommendations are not respected, fines or other supervisory measures may be imposed, which may include referral of the case to the Public Prosecutor’s Office,” the European Union markets regulator said in a statement.

He stressed that European regulators “actively monitor the conduct, orders and transactions in the market”, and where there are reasons “investigate”.

ESMA specified that any explicit or implicit suggestion relative to financial instruments is considered an investment recommendation, which includes opinions about their current or future value, and that through analyst reports, articles, contained in traditional media, but also in social networks.

It is true that normally banks, financial intermediaries or analysts make recommendations, but anyone proposing an investment strategy is bound by the same rules if their recommendations are intended for a wider audience. And that affects the publication on social networks.

So anyone recommending investments by any means of public outreach must abide by the rules, and that means giving their identity, citing their sources, distinguishing facts from interpretations and price targets, detailing the date and time or account for any interest or conflict of interest.

ESMA indicated that all this is justified by the possibility of misleading investors.

This justifies that investment recommendations have to be made “in a specific and transparent way” so that investors, before deciding, can evaluate the credibility of a board and its objectivity and the interests of the person making it.

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