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ESMA’s Statement on Investment Recommendations on Social Media Platforms


The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, issued recently a Public Statement on investment recommendations made on social media.

With this Statement, ESMA explains the rules that apply in situations where someone, based in or outside the EU, spreads information recommending an investment decision on EU financial instruments (e.g. stocks or bonds) aimed at a broad audience. Spreading information includes, for example, sharing an opinion about the present or future price of a particular stock.

Investor protection is at the core of ESMA’s objectives together with financial stability and ensuring stable and orderly markets. Following a rise in investment recommendations made on social media and a concern that retail investors are not aware of the risks associated with following such recommendations, ESMA considers that investment recommendations must be produced and disseminated in an objective and transparent way so that investors, before making any investment decision, can distinguish facts from opinions. It is also crucial that investors are able to easily identify the source of information and any conflicts of interest of those making the recommendations.

If the rules relating to investment recommendations are not adhered to, there can be fines or further supervisory actions, which in case of dissemination of false or misleading information may potentially include the referral to Public Prosecutors for market manipulation.


FAI Comply with its team of experienced compliance professionals ensures expert guidance for your financial institutions. For more information about our services or assistance regarding anything contained in this post, please contact us via email to or call our office on +357 25933301.

Written by Savvas Patsalides, Director of FAI Comply

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