Regulatory Influencer: What Will Change Under Portugal’s New Rules for Financial Product Advertising?

Banco de Portugal, Portugal’s central bank, has announced and issued Banco de Portugal Notice No. 5/2024 setting out the rules and principles for advertising financial products and services, which are set to enter into force on July 1, 2025. The new advertising rules and notices were published in December 2024, following a public consultation to adapt the regulatory framework to the legislative changes since the publication of Banco de Portugal’s Notice No. 10/2008. 

The new notice establishes the principles and rules applicable to the dissemination of advertising by credit institutions, payment institutions and electronic money institutions, among others. It defines the types of advertising regulated and supervised by Banco de Portugal.

The overhaul of advertising rules and requirements is not just limited to Portugal; other countries such as Lithuania, the UK and the US have indicated a view to updating the advertising rules geared at financial products and services within their jurisdictions.

How does this change things?

What were the advertising rules previously?

Since 2008, Banco de Portugal has regulated the advertising of financial products and services, given the importance of advertising in shaping the public's reputation and opinion of the products and services offered for sale.

The regulatory framework on advertising rules was originally set out in Notice No. 10/2008 and has not been revised since. Considering the evolution of advertising activity, in line with the growing digitalisation in the marketing of financial products and services, financial innovation and the new commercial practices of institutions, Banco de Portugal decided to overhaul the 2008 advertising rules.

Comparison between Notice. 10/2008 and Notice No. 5/2024

In the process of finalising the new rules set out in Notice No. 5/2024, following the public consultation, Banco de Portugal assessed the responses it received from eight entities, including industry associations, banks and consumer protection groups. The results of the consultation were published in Banco de Portugal’s Consultation Report No. 2/2024. The key concerns that were highlighted in the draft regulations focused on the clarity of the advertising requirements, the need for self-regulatory mechanisms and challenges in digital advertising compliance.

Unlike the previous rules in Notice No. 10/2008, the new advertising rules have a broader scope, not just covering credit institutions and financial companies, but expanding to cover payment institutions, e-money institutions and credit intermediaries.

The most notable change in the new advertising rules is the establishment of three different types of regulated advertising, each subject to its own set of rules. 

• Advertising financial products and services - this is any form of communication made by a financial entity with the direct or indirect aim of promoting the financial products and services that they provide. The rules have been set out in Chapter II of the notice, and they cover specific rules relating to the advertising of different products and services, such as:
  • Housing and mortgage loans
  • Consumer credit
  • Business loans
  • Deposits;
  • Structured deposits
  • Package accounts

The list of financial products has been expanded from Notice No. 10/2008, which did not cover business loans, structured deposits and package accounts.

• Advertising the activity - this is any form of communication made by a financial entity with the direct or indirect aim of promoting their commercial activity, when subject to supervision by Banco de Portugal, and which does not fall under advertising financial products and services. The rules have been set out in Chapter III of the notice, and it focuses on the expressions of restricted use and expressions that are likely to create confusion when advertising the activity of credit intermediaries.
• Institutional advertising - this is any form of communication made by a financial entity with the direct or indirect aim of promoting the institution and which does not fall within the scope of advertising financial products and services or advertising the activity. The rules have been set out in Chapter IV of the notice.

In addition to the introduction of the new categories of advertising, Notice No. 5/2024 increases further obligations for financial entities intending to engage in advertising. Firstly, an increase in reporting obligations to Banco de Portugal of advertising materials, regardless of the channels used, as set out in Chapter V. Secondly, stricter rules on the minimum character size and spacing requirements in advertising communications, as set out in the Annex to the notice.

The new advertising regime applies to all forms of advertising, regardless of the medium, channel and means of dissemination and places some stricter rules on financial entities under the supervision of Banco de Portugal.

Why should you care? 

As stated above, the new notice broadens the scope of the previous advertising rules to include payment institutions, e-money institutions and credit intermediaries alongside credit institutions and other financial companies. 

The old regulations and amendments failed to keep up with the growing digitalisation of financial products and service marketing, financial innovation and new commercial practices of institutions. Under the new rules, payment and e-money institutions will have a higher duty of care to ensure that their existing and potential customers are well informed and not misled before making decisions on financial products and services through advertising. 

With the new rules, institutions will need to ensure that their advertising practices provide clear, detailed information when promoting payment products and services, particularly with the introduction of stricter rules on the visibility requirements used in advertising materials. This would mean adjustments in how promotional content is displayed, not just on print content but also on digital platforms such as websites, mobile apps and social media.

Implications for financial entities

The new advertising rules may affect the marketing function of financial entities due to:

• The requirement for all advertising materials, especially on social and digital media, to meet enhanced visibility standards.
• The increased need for collaboration between marketing and compliance functions. 

Financial entities, including payment and e-money institutions, should consider:

• The possible increased costs for producing or adapting advertising materials to comply with new rules.
• The need to revise existing advertising materials to meet new visibility requirements.

Although Notice No. 5/2024 does not contain the same specific sanctioning provision as the 2008 rules, which states that violations of the provision may be sanctioned under the terms of the General Regime for Credit Institutions and Financial Companies, Banco de Portugal may still exercise the powers and competencies conferred on it by Article 116(1) of the General Regime. Financial institutions that fail to comply with any part of the new provisions may be subject to fines imposed by the Banco de Portugal.

Along with the possibility of increased collaboration, increased costs and fines for non-compliance, the new advertising rules present an opportunity for financial entities to further modernise their advertising practices in line with technological developments to attract younger and more tech-savvy customers through digital and social media advertising streams. Financial institutions should use this opportunity to focus on integrating digital tools, data-driven strategies and regulatory-compliant innovations, while ensuring that they clearly disclose the information necessary for a correct assessment of the characteristics or benefits highlighted in the product or service that is being advertised.  

To ensure that financial entities are ready for the entry into force of the new advertising rules, they should consider taking the following steps:

• Conduct an audit of all current and planned advertising materials, categorising them into the three types of regulated advertising and ensuring that they meet the enhanced visibility requirements.
• Update internal approval workflows to include marketing and compliance collaboration.
• Update internal sign-off procedures across functions for all campaigns and marketing materials to ensure adherence to the enhanced visibility requirements.
• Train marketing and product teams, including any external marketing agencies used, on the enhanced visibility and restricted expression rules.
• Create checklists for future advertising reviews that meet the Annex standards, to be used internally and externally by any marketing agencies that may be utilised.
• Review internal documentation policies for advertising disclosures to satisfy the new reporting obligations.

Next steps 

All in all, Banco de Portugal Notice No. 5/2024 aims to ensure consumer protection, transparency and fairness in financial services advertising, aligning with the EU’s commitment to these principles. Ultimately, financial institutions that comply with these new rules will earn and maintain consumer confidence.

Banco de Portugal Notice No. 5/2024 setting out the new advertising rules will be applicable from July 1, 2025.