Move on capital-market ads, promos

The revised rules, which are expected to become effective in the current quarter, will mandate provision of sufficient descriptions of offered products and services for investors to make informed decisions. Product characteristics, payment conditions, and the risks involved must be emphasised, not premiums or gifts to sway investors. 

Amid the current highly competitive environment, advertising and sales promotions often lack sufficient information, Vorapol said. At times, they try to entice the investing public with gifts and rush them into decisions. The new rules are designed to discourage this.

Advertisements must not contain false, exaggerating or misleading information. They must not rush investors into making decisions within a limited time frame or mislead them with guaranteed returns on investment. 

During sales promotions, information on the products or services being offered must be prominent. If they contain referrals, the sources of such information must be reliable and clearly specified. Any person appointed as a co-producer of advertising must be subject to supervision to comply with the relevant rules. 

Sales promotions must not urge investors to make decisions without taking into account fundamental factors. In addition, lucky-draw campaigns are prohibited to prevent over-investment or overuse of services. 

The revised rules will be applicable to all types of operators in this field, including securities and derivatives businesses. In addition, operators must comply with the SEC’s approved advertising and sales-promotion guidelines issued by the Thai Listed Companies Association and the Association of Investment Management Companies. 

Any business operator failing to comply with the rules will be subject to the SEC’s order to cease the advertising or sales promotion in question until it complies. The commission may also order such business operators to provide investors with complete and corrected information, or determine that any further advertising or promotions proposed by the operator will be required to obtain the SEC’s prior approval.