Monday, March 27

The CNMV will ask Facebook, Twitter and Google for help to eliminate ads for fraudulent financial products

The National Securities Market Commission (CNMV) announced this Wednesday the launch of a plan to fight against financial fraud this year, given the increase in unregistered platforms and services that are active in Spain. It has been explained by Rodrigo Buenaventura, president of the stock market supervisor, who has advanced that the collaboration of social networks and search engines will be sought to eliminate these advertisements of fraudulent financial products, as well as the involvement of different authorities to have control in real time. and closer to this type of operators that do not comply with the rules.

The CNMV regularly monitors platforms and funds that are marketed in Spain but are not properly registered and, therefore, are likely to be fraudulent. Now, the organization wants to go a step further and involve the large internet platforms. Although Buenaventura has avoided giving names, he has acknowledged that he is already in contact with the large social networks and search engines that operate in Spain, which would include companies such as Facebook, which also owns Instagram, Twitter or Google. The objective of the supervisor is that these platforms can be requested to eliminate paid advertising carried out by operators that are being investigated for fraud by the CNMV.

The supervisor also intends not only to eliminate the paid advertisements carried out by these platforms, but also to eliminate, as far as possible, their appearance in the search results for investment services carried out in the systems of these internet companies.

Although the CNMV recognizes that some of the work necessary to implement the plan against financial fraud is beyond its powers, it intends in the coming months to enter into agreements with public and private entities in order to be able to control more closely the unregistered entities that operate in the country. To do this, it intends to create a database “that is updated in real time”, as Buenaventura has proposed, so that it is accessible to different public institutions, such as the State Security Forces and Bodies or the Administration of Justice. With this, the CNMV points out, the aim is to “improve the effectiveness of the fight against possible fraud and accelerate the measures to reduce its impact”.

In addition, within the strategy of improving the digital supervision tools that the CNMV has, the body intends to incorporate new “search systems for the early detection of unauthorized entities”. This includes tracking systems such as ‘web scrapping’ to collect information from websites, and to be able to monitor the emergence of entities that are not registered.

The CNMV includes this objective of the plan to fight financial fraud in its supervisory action plan document for this year, presented this Wednesday by Buenaventura. The president of the CNMV has placed among the priorities for this year the monitoring of the conversion of the sicav into other investment instruments as an application of the new law against tax fraud, which includes new limits on these vehicles. The CNMV requested that before January 31 all the sicav declare their intention to continue as such or to change their nature —for not complying with the requirements—. However, Buenaventura has declared that some 300 entities are missing that have not yet responded to the supervisor’s request, so in the middle of this month the request was sent to them again. “We hope that it will be redirected in the coming weeks, only in extreme cases would we take other measures,” he said.

The other lines of action proposed by Buenaventura for the CNMV in 2022 include aspects such as the improvement of digital data processing systems by the supervisor, for which it is planned to incorporate five analysts in the coming months. They represent half of the 10 places that the body plans to create this year, in addition to the substitutions already contemplated. The CNMV also plans to advance in new lines of action such as the study of the use of algorithms in the stock market which, as detailed, account for more than half of the operations carried out today in Spain. Other aspects reach more technical issues such as the role of institutional investors in listed companies, the sale of complex products to retail investors or the improvement of financial and non-financial information in the fight against climate change.