An analysis of the law and practice of financial services advertising in Malta

Abstract

The area of financial services in Malta has been given increasing importance since 1994. From then onwards, a large number of new investments have been introduced; hence the need to give information on them to the public and to advertise them. As a result, the need for new laws was being felt. Amongst these, there were the Investment Services Act 1994, the Banking Act 1994 and the Insurance Business Act 1998. Other legislative instruments were also introduced such as the Investment Services· Guidelines and Legal Notices amongst others. All these gave rise to new regulations on advertisements and publicity of financial services. The dissertation deals with the laws and regulations that govern advertisements of insurance policies, investment services and bank deposits. Insurance advertisements in Malta are mainly regulated by the Insurance Business Act 1998, and Directives 5 and 14 of Year 1999. Bank deposits are regulated by the Banking Act 1994 and the 'Banking Notice on Advertising for Deposits' while investment services are mainly regulated by the Investment Services Act 1994 and the Investment Services Guidelines. The advertisements which were selected for the purposes of this dissertation adhere with the relevant legislation. Therefore, it seems that Maltese financial services firms are aware of the delicate nature of the financial services area and are aware of the penalties which may be incurred by not adhering with the law. This dissertation points out clearly the fact that misleading advertising is illegal and ethically unacceptable. Investors, depositors and policy holders should be provided with the correct information in order to be able to make good and informed decisions regarding their investments.