Tighter controls on financial advertising?

Press, 28 November 1979, Page 6

Tighter controls on financial advertising?

PA Wellington The Securities Commission is considering making publishers responsible for the content of financial advertisements, the chairman (Mr C. I. Patterson) said yesterday. Yesterday was the second day of submissions to the commission on how advertisements by banks, finance companies, and the like should be controlled. Mr Patterson said that putting the onus on publishers and broadcasters might be a better way to regulate advertising content than tightening restrictions. He suggested that publishers, before accepting an advertisement, have a knowledgeable, independent person verify its assertions. A certificate from that person would be their defence against liability. Another possibility would involve the commission in drawing up detailed regulations on what financial advertisements must contain, with criminal back-up. Mr Patterson outlined as the third option the legal en- ! forcement of the Committee I on Advertising Practices • code. I The code works as a selfI regulated guide, but the i commission sees possibilities ,in giving it legal teeth. , A body could be given ; supervisory power over the i; code, and authority to discipline any organisation ■ breaching its standards. . In yesterday’s submissions . the Stock Exchange Asso- , ciation told the commission it favoured tighter control

over unregulated areas, rather than “freeing up”! existing controls. It said financial advertising tended increasingly to “paint pictures” round organisations rather than detail their fund-raising or services. This might give some advertisers an unfair advantage over those with a dull prospectus. The Bankers’ Association ) said that more restriction of financial advertising would inhibit and burden legitimate promoters of securities, and would add to the cost of money-raising. It favoured self-regulation, instancing the Committee of Advertising Practices code and said Britain appeared to have no general restrictions on banks advertising for deposits and customers. The Bank of New South Wales also opposed tighter legal controls. It said regulations requiring certain information in advertisements would be illogical and anomalous.