Market conduct supervision

In Portugal, public regulation and supervision of the conduct of institutions in retail financial markets has been named "market conduct supervision". It is laid down in the revised Legal Framework of Credit Institutions and Financial Companies, published in Decree-Law No 1/2008 of 3 January.

Under this legal framework, Banco de Portugal has the power to establish rules of conduct for credit institutions and financial companies ensuring transparency of information during the pre-contractual and contractual stages, namely in advertising, and fairness in transactions in financial products and services between supervised entities and their clients. In addition, it provides for the right of customers to submit complaints directly to Banco de Portugal.

The regulatory, oversight and sanctioning tasks of Banco de Portugal have been reinforced in order to ensure compliance with the principles of transparency and accuracy of information as well as with the law and Banco de Portugal’s regulations regarding retail financial markets and the provision of services.

Banco de Portugal carries out its regulatory power by issuing regulations (notices and instructions) related, inter alia, to public information, advertising, pre-contractual information and the understanding of legal acts.

The oversight function is carried out through inspections and complaint processing with a view to ensuring transparent and accurate public information disclosure, overseeing the compliance both with the law and Banco de Portugal’s regulations and supervising the conduct of credit institutions and financial companies.

Banco de Portugal requires institutions to remedy infractions by setting down specific recommendations and provisions, and applies additional fines and penalties to non-compliance. 
 
On the supply side, market conduct supervision ensures that institutions have high levels of competence to carry on their activities and comply with the principles of transparency, diligence, respect, honesty and integrity in their relations with clients. On the demand side, it develops activities aimed at increasing the levels of information and financial training, namely through its Bank Customer Website.