Advertisements for Investment Products in Portugal No Longer Require Prior Authorization

The Portuguese government has enacted a new regulation for advertising campaigns of retail investment products, such as individual retirement plans (PPR) and investment-based insurance. With the new rule, the promotional activities for these financial products no longer require pre-approval from regulatory bodies before publication. Instead, the system is transitioning to a notification model that allows the regulator to object within ten business days after the advertisement is broadcast. This change forms part of the government's broader administrative reforms aimed at simplifying financial supervision processes. Thus, the marketing activities of financial institutions can be implemented much faster and more flexibly than before.

The new regulation was officially formalized by the publication of a Decree in the Official Gazette, directly affecting the promotional processes of retail investment products (PRIIP) and investment-based insurance products. The Decree replaces the strict and time-consuming oversight mechanism that had been in place since 2018. Under the old system, financial institutions were required to apply to relevant authorities such as CMVM, ASF, or the Bank of Portugal and wait up to seven business days for approval before publishing any advertisement. With this legal change, advertisements for products such as PPRs, capitalization insurance, structured deposits, and retail bond issues are no longer a bureaucratic obstacle. This situation allows for a faster flow of information to consumers by increasing competition in the financial markets.

This step by the government is a concrete reflection of the policy changes announced in May, justified by the need for 'further simplification' in supervision processes. The core logic of the new system is to shape advertising oversight according to the complexity and risk level of the products. For example, for products considered complex financial instruments, regulatory bodies retain the power to intervene before the advertisement goes live. This structure has been designed to be fully compliant with the European Union's Parliament and Council Regulation No. 2019/1156. Therefore, controls have not been completely abolished; however, a more targeted and flexible supervisory framework has been adopted.

There are also situations exempted from the regulation that constitute a significant exception; specifically, products falling under harmonized funds, such as PPR/UCITS, will not be affected by this new prior notification requirement. These products are included in the exception because they are considered a relatively less risky and non-complex savings tool well-known to the Portuguese. This is because, in 2018, during the transposition of a new EU directive regarding financial markets into national law, a special legal arrangement was made to prevent traditional PPR funds from falling under the 'complex product' status, allowing the funds to transition to a harmonized structure. On the other hand, changes were also made regarding the processes for presenting the Key Information Document (KID), granting supervisory authorities the power to extend the prior notification period up to five business days if needed.

The final important topic in the legislation consists of the transitional provisions regulating the shift from the old system to the new one. Advertising campaigns already awaiting approval under the old rules on the date the Decree enters into force will have the opportunity to complete their processes according to the previous regulations. This transition period application has been planned to ensure that financial institutions and supervisors can make their operational adaptations without falling into legal uncertainty. In the long term, the effects of the new regulation on Portugal's financial product market will be closely monitored in terms of market dynamics and consumer protection standards. Consequently, this reform stands out as one of the important steps taken by the Portuguese government to revitalize the markets and reduce bureaucratic burdens.