Guidelines on Advertising Financial Services

Taking into consideration the nature and specificity of financial services, their exclusiveness in
terms of complexity and the risk that is often characteristic to them, as well as the need to ensure
that the content and form of financial services advertising complies with the requirements of legal
acts, do not violate the interests of customers and do not mislead them, also in an attempt to improve
the quality of financial services advertising and to increase confidence in the financial market and
its participants, the Supervision Service of the Bank of Lithuania prepared the Guidelines on
Advertising Financial Services. The Guidelines are applicable to financial market participants
supervised by the Bank of Lithuania and cover all financial services advertising. The Guidelines
were prepared on the basis of the requirements established in legal acts that are applicable to
financial services advertising and good practice of supervisory authorities of other countries.

The objective of the Guidelines is to clarify the requirements of legal acts regarding financial
services advertising, to attract attention of market participants to the most important aspects of the
preparation and distribution of financial services advertising and to help them properly implement
the provisions of respective legal acts.

The main provisions of the Guidelines:

- When advertisements represent information about potential benefits, information about benefits
should not be given undue prominence compared with information about potential risks.

- It is recommended that information about fees related to the financial service provision be
included in advertisements. The following requirements should be observed when providing this type
of information:
1) advertisements must represent special conditions related with the applied fees;
2) when representing financial services advertisements should not include such words as “free of
charge”, “cost-free”, etc., if servicing, administration fees or other charges related to the provision of
financial services are applied.

- Warnings, standard and other information important to consumers, which are specified in the
Guidelines, should be clearly stated, and not be hidden.
Requirements for radio and TV commercials and other limited-time advertisements and broadcasts:
1) consumer important information (including warnings, standard or other information important to
consumers, which are specified in the Guidelines) presented in an audio add where no visual means are
provided must be clearly audible, while visual advertisements must be easily legible and, where audio
means are used, read out loud at the end of the broadcast. Audio advertisement items are not required to
present the service provider’s full name;
2) viewers of video advertisement items should be given enough time to read the entire text and related
information provided in them (including the Guidelines-specified warnings, standard or other
information important to consumers), as well as the promoter’s full name.

Special requirements for advertising investment services and products (including unit-linked life
insurance and investment deposits):
- advertisements should include a clear reference to the product’s document and/or the
document (if available) containing the description of an investment product or investment service
related risk, and point out locations for consumers to receive or read it.
- only updated (relevant) information on operational results should be presented in an
advertisement;
- various requirements for rendering past and future results of the service or product;
- it is recommended for an advertisement to contain the following warnings:
1) investing means taking risk;
2) that the consumer must examine the product documentation which contains detailed description of
the product features, including the inherent risks;
3) corresponding charges and other deductions shall be applied.

Special requirements for advertising deposit products

- It is recommended to specify in a deposit advertisement whether the deposit will be covered by
deposit insurance.
- In case that the deposit advertisement presents interest rates, it must specify the following:
1) annual interest rate for the deposit;
2) whether the interest rate is variable;
3) the deposit term on which interest is paid, if applicable;
4) the minimum deposit amount, if applicable;
5) the periodicity of the interest payments, if applicable.

Special requirements for advertising insurance products

- An insurance advertisement should contain an explicit statement saying that it is an insurance
advertisement, and the information presented should not contradict information in the insurance
regulations. Also, it must clearly point out places where the insurance rules are available.

Special requirements for advertising credit products

- Advertisements of consumer credit agreements, which specify the interest rate or consumer credit-
related charges, must contain the following standard information which has to be presented in an
explicit, concise and prominent manner:
1) the rate of the consumer credit interest, whether fixed or variable, and information about charges
included in the total cost of the consumer credit;
2) the total amount of consumer credit;
3) the annual percentage rate of the charge on the total consumer credit cost;
4) if applicable, the consumer credit agreement duration and the consumer credit repayment term (in
case of their mismatch);
5) the cost of goods and services, and the amount of an advance payment in the case of a credit in the
form of deferred payment for a specific good or service;
6) if applicable, the total amount payable by the consumer and the amount of the instalments.

- Advertisements of credit agreements secured through the pledge of real estate (mortgage) must clearly
and prominently specify the following:
1) information that the credit agreement is concluded and credit issued on condition that the credit
repayment liability is secured through the pledge of real estate (mortgage);
2) a warning concerning the risk to loose (be deprived of) the ownership right to the pledged real estate,
if the credit recipient defaults his liabilities under the credit agreement.
The whole document in Lithuanian is available on the Bank of Lithuania website.