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New Advertising Act passed by the Parliament

23.03.2008

On 12 of March 2008 the Estonian Parliament passed the new law on advertising (the Advertising Act) the date of entry into force of which is 1 of November 2008. The intention of the law is to aggregate the regulatory requirements for advertisements to the widest extent possible into one act. Nevertheless, the sector specific requirements (e.g. in the case of the securities markets, investment funds) have been left to the scope of specific regulation in order to achieve wider legal clarity, as these requirements are in close interaction with the provision of certain services. Considering aforesaid, when advertising investment funds or investment services, the Advertising Act is to be applied in compliance with the specific rules set forth respectively in the Investment Funds Act or in the Securities Market Act.

Services rendered on behalf of the subjects of financial supervision as prescribed by the Financial Supervision Authority Act as well as the financial services stipulated in the Credit Institutions Act are considered as financial services in accordance with the Advertising Act. As prescribed in § 29 of the Advertising Act the advertisement of financial services must include a calling to acquaint yourself with the terms of the financial services offered and to consult with an expert if necessary. There are also specific requirements to be adhered when offering credit. For example when promoting credit to consumers below the value of 10 000 EEK or the repayment date of which is less than six months, the annual percentage rate of charge shall be presented. This requirement is essential in the case of SMS credit which is currently being widely promoted.

The general authority for the supervision over the advertisement activities remains with the Consumer Protection Board whereas the supervisory powers and authority over the conditions established in sector specific law is established in the relevant legal act. The Estonian Financial Supervision Authority has the supervisory powers over the advertising of financial services by the subjects of financial supervision (e.g. credit institutions, investment firms, management companies).

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