Finfluencers: Master the rules of the game!

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Complying with the law

The lawsIn particular, the Securities Act This link will open in a new window, the Derivatives Act This link will open in a new window and the Act respecting the distribution of financial products and services This link will open in a new window. that govern the financial sector protect investors and help ensure market integrity. They set minimum requirements and provide important protections to investors if there’s a problem.

The AMF monitors specific on-line financial discussions involving influencers introducing or promoting financial products in order to detect potential misrepresentations or violations of the law.

For example, providing financial services and investment advice, in particular without being duly authorized to practise may violate the laws that govern the financial sector unless an exemption or exception applies to you.

Where an offence is committed, the Securities Act imposes significant penalties, including imprisonment for up to five years less one day if the offender is an individual and fines that can amount to several million dollars if the offender is a company.

The AMF takes enforcement actions when the public interest is at stake.

Finfluencers: What you should know

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Carefully consider the content that you are posting and ask yourself if you are providing financial products and services such as financial product advice or financial product transactions.

You must be authorized by the AMF in order to provide financial products and services. If you’re not, you may be contravening the requirements of the law. If you would like to become a financial sector practitioner, refer to the Becoming a professional section of our website.

If you are uncertain about your legal obligations, you should seek professional legal advice

Even if the information you’re posting seems accurate, if your on-line message is deceptive or misleading, you may be breaking the law.

You could also be contravening the provisions of other laws, such as the Consumer Protection Act, or standards such as the advertising standards in influencer marketing or the standards relating to deceptive marketing practices.

Scenarios involving finfluencers

Although the following examples are designed to help you assess whether your activities are compliant with the law, they do not cover all situations. It is important that you consider both the general impression conveyed by the content you post and the context surrounding the content.

What the law says

Financial product advice is a recommendation or statement of opinion that is, or could be reasonably regarded as being, intended to influence a person in making a decision about a financial product.

You can share factual information that describes the features or terms and conditions of a financial product (or class of financial products) without providing financial product advice. However, if you present factual information in a way that conveys a recommendation to invest (or not invest) in the product or class of product, you may be contravening the law by providing financial product advice without being duly authorized to practise.

As a financial influencer, the fact that you derive certain benefits or receive compensation, or expect to do so, for commentary, advice or recommendations relating to financial products could indicate that you are more likely to be providing financial product advice.

Here are some examples:

“I’m going to tell you about five long-term stocks that are going to do well and that you should buy and hold onto.”

  • The message is intended to influence a person’s decision to buy specific financial products.
  • It provides an opinion on the products in question.
  • It likely constitutes financial product advice.

“I recommend you buy crypto token XYZ. This is a fascinating project, a real gem. The price is going to skyrocket and you’ll receive dividends every month.”

  • Token XYZ may be a security within the meaning of the Securities Act.
  • You are recommending to a recipient that they buy it.
  • This likely constitutes financial product advice and you are likely engaging in the activity of a securities adviser.

“Exchange traded funds (ETFs) can track various asset classes or individual assets that may generate a return, but the ETF provider holds the shares or assets on behalf of the fund’s securityholders.”

  • This describes a type of financial product without implicitly recommending a product over another.
  • This is unlikely to constitute financial product advice.

“I’m an influencer. I post general discussions of the merits and risks of ABC’s stock.”

  • This information is not intended to meet a recipient’s specific needs.
  • This likely constitutes general advice.
  • This is unlikely to constitute financial product advice requiring registration with the AMF.

“How I became a millionaire? Take our course and become a stock market expert!”

  • A course on trading in financial products would likely not constitute financial product advice.
  • However, make sure you don’t exaggerate or make misleading statements.

“During my course, I propose stock buy and sell signals that will help maximize your returns.”

  • This message provides an opinion on financial products.
  • It provides a recommendation to buy or sell financial products.
  • This likely constitutes financial product advice.

“I specialize in creative mortgage financing involving multiple private mortgage lenders. I guarantee that you’ll get a mortgage loan despite your poor credit score. There’s no need to deal with a mortgage broker.”

  • You are likely acting as a mortgage broker.
  • If, to your knowledge, documents presenting false or misleading information are submitted to the lender or borrower, you may be contravening the law.
What the law says

Arranging for a person to, for example, buy or sell a financial product is equivalent to acting as an intermediary and providing a financial service. Organizing the sale or purchase of a financial product for a third party depends on your level of involvement in completing the transaction.

Here are some examples:

You provide your followers with a link they can use to invest in a project that will make them a lot of money without any involvement on their part. You receive a percentage of the amount invested by the followers referred by you.

  • You are suggesting that your followers carry out securities transactions.
  • You are deriving a benefit from doing so.
  • This likely constitutes the organization of a financial product transaction triggering the requirement to register as a securities or derivatives dealer.

You send the names and contact information of a cryptoasset trading platform that is registered with the AMF.

  • There is no other implication or compensation related to a subsequent transaction.
  • This is unlikely to constitute organizing a financial product transaction triggering the requirement to register as a securities or derivatives dealer.
What the law says

Under the law, it is prohibited to, among other things, provide any misrepresentation (i.e., any misleading information on a fact that is likely to affect the decision of an investor, including the omission of such a fact) regarding financial products. This prohibition covers not only registrants or entities supervised by the AMF, but anyone that provides information, produces documents or makes statements regarding securities or securities transactions.

Your statements and information must be true and accurate, and you must be able to justify them. If, for example, you make a prediction about a future return or a level of risk, you must have reasonable grounds for making the prediction. From a legal perspective, the important thing to know is not whether you intend to mislead, but what the actual impression your message conveys to a person reading it—in other words, whether it is truly misleading or likely to mislead any member of the public who receives it).

The law also prohibits any person from engaging in any act, practice or course of conduct if the person knows, or ought to know, that the act, practice or course of conduct creates or contributes to a misleading appearance of a trading activity in, or an artificial price for, a security or perpetrates a fraud.

Here are some examples:

“Holding onto this stock for the long term will generate significant returns: It’s like money in the bank!”

  • It is unlikely that the statement regarding “significant returns” can be justified.
  • The risks associated with the product are not explained or disclosed.
  • The message gives the impression that the product is safe, which may not be true.
  • It is likely to be misleading.

“Trading in this derivative is a way to make a quick profit at no risk – I earned $$$$ just by buying these products!”

  • Suggesting that the transaction is risk-free is likely to mislead people, even if the comment about the amount of money earned can be substantiated.
  • It is likely to be misleading.

“Mutual funds offer good diversification across asset classes, even if there’s still a risk of the market or sector tracked by a mutual fund declining in value.”

  • The risks and benefits are given the same importance.
  • This is unlikely to be misleading.

What the law says

Financial product advice is a recommendation or statement of opinion that is, or could be reasonably regarded as being, intended to influence a person in making a decision about a financial product.

You can share factual information that describes the features or terms and conditions of a financial product (or class of financial products) without providing financial product advice. However, if you present factual information in a way that conveys a recommendation to invest (or not invest) in the product or class of product, you may be contravening the law by providing financial product advice without being duly authorized to practise.

As a financial influencer, the fact that you derive certain benefits or receive compensation, or expect to do so, for commentary, advice or recommendations relating to financial products could indicate that you are more likely to be providing financial product advice.

Here are some examples:

“I’m going to tell you about five long-term stocks that are going to do well and that you should buy and hold onto.”

  • The message is intended to influence a person’s decision to buy specific financial products.
  • It provides an opinion on the products in question.
  • It likely constitutes financial product advice.

“I recommend you buy crypto token XYZ. This is a fascinating project, a real gem. The price is going to skyrocket and you’ll receive dividends every month.”

  • Token XYZ may be a security within the meaning of the Securities Act.
  • You are recommending to a recipient that they buy it.
  • This likely constitutes financial product advice and you are likely engaging in the activity of a securities adviser.

“Exchange traded funds (ETFs) can track various asset classes or individual assets that may generate a return, but the ETF provider holds the shares or assets on behalf of the fund’s securityholders.”

  • This describes a type of financial product without implicitly recommending a product over another.
  • This is unlikely to constitute financial product advice.

“I’m an influencer. I post general discussions of the merits and risks of ABC’s stock.”

  • This information is not intended to meet a recipient’s specific needs.
  • This likely constitutes general advice.
  • This is unlikely to constitute financial product advice requiring registration with the AMF.

“How I became a millionaire? Take our course and become a stock market expert!”

  • A course on trading in financial products would likely not constitute financial product advice.
  • However, make sure you don’t exaggerate or make misleading statements.

“During my course, I propose stock buy and sell signals that will help maximize your returns.”

  • This message provides an opinion on financial products.
  • It provides a recommendation to buy or sell financial products.
  • This likely constitutes financial product advice.

“I specialize in creative mortgage financing involving multiple private mortgage lenders. I guarantee that you’ll get a mortgage loan despite your poor credit score. There’s no need to deal with a mortgage broker.”

  • You are likely acting as a mortgage broker.
  • If, to your knowledge, documents presenting false or misleading information are submitted to the lender or borrower, you may be contravening the law.

What the law says

Arranging for a person to, for example, buy or sell a financial product is equivalent to acting as an intermediary and providing a financial service. Organizing the sale or purchase of a financial product for a third party depends on your level of involvement in completing the transaction.

Here are some examples:

You provide your followers with a link they can use to invest in a project that will make them a lot of money without any involvement on their part. You receive a percentage of the amount invested by the followers referred by you.

  • You are suggesting that your followers carry out securities transactions.
  • You are deriving a benefit from doing so.
  • This likely constitutes the organization of a financial product transaction triggering the requirement to register as a securities or derivatives dealer.

You send the names and contact information of a cryptoasset trading platform that is registered with the AMF.

  • There is no other implication or compensation related to a subsequent transaction.
  • This is unlikely to constitute organizing a financial product transaction triggering the requirement to register as a securities or derivatives dealer.

What the law says

Under the law, it is prohibited to, among other things, provide any misrepresentation (i.e., any misleading information on a fact that is likely to affect the decision of an investor, including the omission of such a fact) regarding financial products. This prohibition covers not only registrants or entities supervised by the AMF, but anyone that provides information, produces documents or makes statements regarding securities or securities transactions.

Your statements and information must be true and accurate, and you must be able to justify them. If, for example, you make a prediction about a future return or a level of risk, you must have reasonable grounds for making the prediction. From a legal perspective, the important thing to know is not whether you intend to mislead, but what the actual impression your message conveys to a person reading it—in other words, whether it is truly misleading or likely to mislead any member of the public who receives it).

The law also prohibits any person from engaging in any act, practice or course of conduct if the person knows, or ought to know, that the act, practice or course of conduct creates or contributes to a misleading appearance of a trading activity in, or an artificial price for, a security or perpetrates a fraud.

Here are some examples:

“Holding onto this stock for the long term will generate significant returns: It’s like money in the bank!”

  • It is unlikely that the statement regarding “significant returns” can be justified.
  • The risks associated with the product are not explained or disclosed.
  • The message gives the impression that the product is safe, which may not be true.
  • It is likely to be misleading.

“Trading in this derivative is a way to make a quick profit at no risk – I earned $$$$ just by buying these products!”

  • Suggesting that the transaction is risk-free is likely to mislead people, even if the comment about the amount of money earned can be substantiated.
  • It is likely to be misleading.

“Mutual funds offer good diversification across asset classes, even if there’s still a risk of the market or sector tracked by a mutual fund declining in value.”

  • The risks and benefits are given the same importance.
  • This is unlikely to be misleading.

Finfluencers: Be careful when you engage in work that is paid or from which you derive a benefit

  • When you hold a financial or other interest in securities that you recommend, even if your recommendation is not intended for any recipient in particular, you should disclose any compensation or benefit you, or persons related to you, have or receive to your followers.
  • Consider negotiating a written agreement and make sure you understand the agreement terms and conditions.

Issuers and persons authorized to practise who use the services of financial influencers

If you use finfluencers to, for example, promote your services on social media, you could be held liable for any errors they may commit, because they are acting on your behalf and are your “representatives” for the purposes of the laws that govern the financial sector.

Make sure:

  • they have received proper training;
  • you implement appropriate controls to ensure that the services they provide are not contrary to law.
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Information

Report unauthorized activity to the AMF

An unauthorized activity may be reported to us so we can consider the appropriate remedies.

End of the Information

IMPORTANT

This webpage does not cover all the legal and regulatory provisions that apply to finfluencers and is not a substitute for professional advice. We encourage you to seek professional legal advice on how the relevant laws apply to you, as it is your responsibility to know your obligations.

Note that this webpage avoids complex legal language as much as possible and may contain generalizations or shortcuts with respect to the application of the law. Some provisions used may include significant exceptions, conditions or clarifications. In general, your particular situation must be considered as a whole in determining how the law applies to you.