Learn Marketing Communication & MiFID II Investor Protection in 2026
Under MiFID II, marketing communications are governed by strict regulatory requirements designed to ensure that investors receive information that is fair, clear and not misleading. This is particularly important in relation to retail clients, who may have less experience or knowledge of complex financial products. Firms must therefore present promotional information in a balanced and transparent manner, ensuring that potential benefits are not emphasized without giving appropriate prominence to the associated risks, limitations or conditions.
These requirements apply across all promotional channels, including advertisements, brochures, websites, emails, social media and influencer or affiliate campaigns. Firms remain responsible for ensuring that all marketing communications, including those issued by third parties, comply with applicable regulatory standards.
In this article, the SALVUS Regulatory Compliance Team discusses the:
1. Investor Protection under MiFID II
2. Product Intervention Measures
3. Marketing Communication
4. Business Development and Remuneration Practices
We regularly share bite-sized insights on LinkedIn such as those found in this article
1. Investor Protection under MiFID II
Under MiFID II, Investment Firms are required to act honestly, fairly and professionally, with due regard to the best interests of their clients. Financial instruments must be designed for an identified target market and distributed in a way that remains consistent with the needs, characteristics and objectives of the clients for whom they are intended.
CySEC has repeatedly identified shortcomings in the area of investor protection, including misleading or inadequately targeted communications, insufficient disclosures and weaknesses in client assessment processes.
Before providing investment services, CIFs must inform clients of their classification as Retail Clients, Professional Clients or Eligible Counterparties. Clients must also be made aware of their right to request a different classification and be provided with the terms and conditions governing their relationship with the firm.
CIFs must ensure that information concerning the firm, its services, client funds or assets and the financial instruments offered is accurate, clear and presented in a manner that clients can understand. Staff providing information or advice must also have the necessary knowledge and competence to communicate appropriately and effectively.
Where investment advice or portfolio management services are provided, CIFs must obtain sufficient information on the client’s knowledge and experience, financial circumstances, investment objectives and risk tolerance in order to assess suitability. For execution-only and certain non-advised services, an appropriateness assessment may instead be required.
Since 2022, firms providing investment advice must also take clients’ sustainability preferences into account. This includes assessing whether relevant products are consistent with those preferences and reflecting the outcome in the suitability report.
Best Execution is another fundamental element of the MiFID II investor protection framework. Firms must take all sufficient steps to achieve the best possible result when executing client orders, maintain a comprehensive Order Execution Policy, monitor its effectiveness and periodically assess the fairness of the prices offered to clients.
2. Product Intervention Measures
Contracts for Difference (CFDs) are complex, highly leveraged financial instruments that are frequently used for speculative trading. ESMA and national competent authorities identified a significant increase in the promotion and distribution of CFDs to retail clients, together with high levels of client losses and concerns regarding transparency, particularly in relation to fees, spreads, leverage and financing costs.
In response, ESMA introduced Product Intervention measures aimed at strengthening the protection of retail clients. These measures include:
- Initial Margin Protection, which limits leverage in order to reduce potential losses and improve investor protection.
- Margin Close-Out Rules, requiring open positions to be closed when the funds available in a client’s account fall below a prescribed threshold.
- Negative Balance Protection, ensuring that retail clients cannot lose more than the amount available in their CFD trading account.
- Restrictions on Bonuses and Incentives, limiting promotional practices that may encourage excessive or inappropriate trading activity.
The measures also seek to address conflicts of interest that may arise where a firm’s business model allows it to benefit from client losses. ESMA further coordinated restrictions on the marketing, distribution and sale of CFDs across the EU, with most Member States adopting similar measures and certain jurisdictions introducing additional safeguards or broader restrictions on CFD promotion.
3. Marketing Communication
Marketing Communication refers to information issued or distributed by CIFs for the purpose of promoting financial products or investment services. Under MiFID II, all such communications, including advertisements, website content, social media posts and materials distributed through third parties, must be presented in a manner that is fair, clear and not misleading.
On 27 May 2024, ESMA published its Final Report on the 2023 Common Supervisory Action (CSA) and Mystery Shopping Exercise concerning marketing communications. As part of this exercise, National Competent Authorities assessed firms’ arrangements for the preparation, approval, review and ongoing monitoring of marketing materials. The main supervisory observations included:
- Production processes, where NCAs identified broadly similar approaches among firms, while also noting differences depending on firm size, distribution methods and the types of financial instruments being promoted.
- Approval processes, where certain firms were found to lack formally documented approval procedures or did not consistently involve compliance and legal functions across all communication channels.
- Review processes, where some firms did not perform adequate ongoing reviews to confirm that marketing materials remained consistent with previously approved content.
- Sustainability claims, where weaknesses included insufficient internal guidance and limited controls designed to prevent misleading environmental or sustainability-related claims.
- Outsourcing Risks, where NCAs identified shortcomings in the oversight of third-party marketing content, including reliance on sampling approaches that could fail to detect non-compliant materials.
- Record-Keeping and Complaints, where some firms lacked adequate written procedures for retaining marketing records and were unable to evidence the approval process or previous versions of specific marketing communications.
4. Business Development and Remuneration Practices
CIFs must ensure that all client communications are consistent with MiFID II requirements. Firms should clearly identify the company and its CySEC authorization, provide accurate information about the investment services offered, and present potential benefits and associated risks in a balanced manner. Communications should also be expressed in clear and straightforward language that can be readily understood by the intended audience.
During sales calls, employees must avoid providing unauthorized investment advice or personal recommendations, making promises of profits, or using misleading sales practices. Appropriate call-monitoring arrangements should therefore be in place to review recorded communications and ensure that call records are retained for at least five years.
MiFID II also requires remuneration arrangements to support clients’ best interests. ESMA’s remuneration guidelines emphasize that firms should incorporate qualitative criteria into their remuneration policies, avoid incentives that could encourage employees to prioritize the firm’s interests over those of clients, and limit short-term performance targets that may lead to outcomes that are not in clients’ best interests.
Final Thoughts
In conclusion, investor protection and marketing communications under MiFID II remain key areas of regulatory attention as supervisory expectations continue to develop. Clear and transparent communication, effective governance arrangements and responsible marketing practices are essential to protecting clients and supporting compliance with the MiFID II framework, particularly where retail and vulnerable investors are concerned.
To address these regulatory expectations, SALVUS Funds, in collaboration with the Institute for Professional Excellence (IforPE), offers the self-study course “Learn Marketing Communication & MiFID II Investor Protection in 2026.” The course provides an overview of the information requirements applicable to investors, restrictions on marketing communications and the Product Governance obligations arising under the Markets in Financial Instruments Directive (MiFID II).
The SALVUS Regulatory Compliance team can support CIF regulated entities obliged under the MiFID regulatory framework, to fulfill their annual regulatory reporting obligations and prepare your Annual Compliance Report through our Compliance Consulting service.
For more information, contact us at compliance@salvusfunds.com.
#StayAhead
The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.