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All marketing materials of SFC-authorised collective investment schemes (for example, funds, investment-linked assurance schemes and MPF products) for distribution to the public must comply with the SFC's Advertising Guidelines Applicable to Collective Investment Schemes Authorised under the Product Codes. Here are some tips to help you comply with the Guidelines when preparing product advertisements.
1. What are the mandatory disclosures in product advertisements?
The marketing materials should contain:
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a. |
the full name of the issuer of the document; |
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b. |
where the material is exempted from SFC's prior approval, a statement that the advertisement has not been reviewed by the SFC; |
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c. |
warning statements to the effect that investment involves risk and that the offering document should be read for further details including the risk factors; and |
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d. |
upfront disclosure of the key risks relevant to the product. |
2. What is the SFC's expectations of the upfront risk disclosures?
The SFC expects that the key features and risks of the product are summarised in a few bullet points placed in prominent position, such as in a window on the front cover or at the top of the marketing material, and covering:
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a. |
what is the product and what does it do; |
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b. |
what are the very key risks; and |
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c. |
what is the worst case scenario for investors. |
3. Can fund performance information be shown?
Yes, if the fund has an investment track record of at least six months. You must also include the following:
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a. |
returns of the immediately preceding five years (or the period since launch if shorter), presented based on complete 12-month periods; |
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b. |
the computation basis (for example, NAV-to-NAV, with or without dividends reinvested), source and date of information; and |
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c. |
a warning that the past performance information presented is not indicative of future performance. |
4. What are the disclosure requirements applicable to website materials?
The above disclosure requirements also apply to the product's website if it targets Hong Kong investors. The required disclosures usually appear at the first point of access of the website or fund-related section. You may use hyperlinks to provide the required minimum performance information whenever product performance is disclosed.
5. What disclosures should you avoid in the marketing materials?
Marketing materials should not carry any exaggerated or unwarranted slogan. Use of terms like "guarantee" should be avoided unless the product has a guarantee feature and what is being guaranteed is clearly spelt out.
The use of gifts or financial incentives (other than the reduction of fees and charges) should not be used in product promotions.
6. How frequently should performance information be updated?
Performance information should be up-to-date; meaning no more than three months old if included in print media, broadcasts or interactive systems, and no more than six months old in other media. Performance information should also be updated if more recent information is significantly different.
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