This informal CPD article, ‘A Warning No One Can Read: The Fair, Clear and Not Misleading Standard After the AFM's Lynx Decision’, was provided by CPDs.Academy, a CPD training platform delivering compliance education for professionals in EU-regulated financial services.
A risk warning that nobody can actually read does little to protect anyone. That idea sits at the centre of a EUR 300,000 penalty the Netherlands Authority for the Financial Markets imposed on the retail broker Lynx B.V. in April 2025. The fine did not turn on a false claim about a product or a hidden charge. It turned on how the firm displayed the risks in its advertising. The duty to give clients information that is fair, clear and not misleading is among the oldest in investment regulation, and firms tend to treat it as settled. The Lynx decision is a reminder that it can bite on presentation alone.
What the law requires
The standard operates on two levels. Article 24(3) of MiFID II requires that all information an investment firm addresses to its clients, marketing communications included, be fair, clear and not misleading (1). Article 44 of the MiFID II Delegated Regulation then works the principle into detail (2). One part of Article 44 concerns balance: where a communication draws attention to the potential rewards of a service or instrument, it must set an accurate and equally visible account of the risks beside them. Another part, Article 44(2)(c), concerns presentation. The risk indication must be given in a font size at least equal to the font size predominantly used throughout the information, and the layout must safeguard the prominence of that indication (2).
The presentation requirement is easy to state and easy to underrate. A warning lost in the design of a communication does not do the job the rule sets for it. What the regulator looks for is not simply that a warning appears somewhere in the material, but whether an ordinary reader, seeing the communication as it is actually served, would notice it and take it into account. Presence on the page is where the analysis begins, not where it ends.
That matters more for some audiences than others. Lynx provides execution-only services to retail investors, whom the AFM described as attracted to active trading, which makes clear risk information especially important. The harder a firm leans on an eye-catching offer to draw in that kind of client, the more the balancing risk information needs to carry real visual weight rather than sit in a footer.
The Lynx case
The advertising grew out of a welcome offer: new clients who opened an account could have up to EUR 500 of their transaction costs returned. The campaign ran through print magazines, news websites and Google's display and video networks, and onto the firm's homepage. The examples the AFM took were drawn from material published in the period from 1 December 2023 to 24 February 2024, with the homepage captured on 19 March 2024 (3). The campaign was large. The firm had put out over 2,500 separate expressions across 23 types of channel, yet the regulator did not rest its case on scale. It looked closely at five of them and at the homepage, and each carried a risk warning that did not work.
The failures came in two shapes. Sometimes the warning was simply the least visible text on the page, overwhelmed by a headline and a bold figure promising money back. More often the trouble lay in layout and contrast. A warning printed in white on a coloured background. A warning swallowed by brighter elements around it. A warning set in a thin strip along the foot of a Google image that dissolved into illegibility once the advertisement was served as a small thumbnail. In one video execution the warning played against a pale backdrop for the opening seconds and could not be made out. On the homepage, the screen a visitor saw first sold the service and gave no risk information at all, the warnings surfacing only after a long scroll (3). Across the formats the hierarchy was constant: the offer reached the eye first, and the risk lingered at the edges.
The two failings trap firms differently. A font that is too small is a measurable error, the kind a checklist catches and the easier of the two to put right. Layout is subtler. A warning can clear the font-size hurdle and still fail, because the contrast against its background is poor, because a brighter element nearby pulls the eye away, or because the reader has to scroll a long way or open a hidden panel to reach it. The AFM treated both as breaches of the same rule. A warning a reader cannot find is of little use to that reader, and an accurate disclosure in the wrong place can fail a test that a plainer firm with a cruder layout would pass.
Investment firm supervised by CySEC
The responsive formats deserve a closer look, because they show where modern advertising strains the rule. Lynx supplied headline and description components that Google assembled and resized automatically for each device and placement. In some rendered combinations, the only risk indication was embedded in the shrunken image or video and was no longer readable, while the accompanying headline or description contained no risk indication (3). The AFM's response was firm. A firm is responsible for how its advertising is configured across every format in which it can appear, and a set-up that lets the warning drop out of sight depending on how the advertisement is rendered does not meet the standard. Prominence has to hold in each rendered form, not on average.
What lifted this from a quiet correction to a monetary penalty was the firm's record. Over the previous decade the AFM had raised Lynx's advertising with it more than once, and each time the pattern repeated: the firm would put a problem right when the regulator pointed to it, and a similar one would surface later (3). From a statutory base of EUR 500,000, the AFM arrived at EUR 300,000, partly because the proven breaches were a contained set within a much wider campaign, and partly because Lynx cooperated during the investigation and afterwards rebuilt its client-information controls under an external project manager and retrained its marketing staff. Lynx objected, the AFM rejected the objection with fuller reasoning on 15 October 2025, and the firm chose not to go to court. The penalty is final.
One thread of the reasoning is worth lifting out of the case. The AFM assessed the communication as presented: font size, colour, contrast, placement and the surrounding visual elements all counted. A business that can make an offer jump off the page can make a warning legible, and a warning that sits beneath every other element while the offer shouts does not do what the rule requires, whatever its wording. The craft that goes into selling the product is expected to carry the risk as well.
What it means for firms
Article 44 applies across the Union, and an investment firm supervised by CySEC answers to the same presentation rule that caught Lynx (2). A single national decision does not bind other regulators, but it is a fair indication of how the rule is likely to be read. The working test it leaves is concrete. Is the warning's font genuinely the equal of the text around it. Does it have the contrast to be read against its background. Is it placed where a real reader will meet it rather than scroll past. And does it hold together across every format and device the message goes out on, from a full page in a magazine to a thumbnail in an inbox. A disclosure that works in print and disappears on a phone has not done its job.
For a compliance function, the lesson is that sign-off cannot stop at the wording. A risk statement can be legally accurate and still fall short if it is set in the smallest font on the page or lost on a particular screen. The review has to take in the finished creative in the formats a client will actually see, and the marketing team has to understand that prominence is a compliance requirement, not a matter of taste. Where advertising is assembled dynamically, someone has to confirm that a legible warning survives every combination the system can produce.
There is a record-keeping dimension to this as well. If prominence has to hold in every rendered form, a firm needs to be able to show what its advertising actually looked like in the field, not only what the design file intended. Keeping the served versions, together with a note of how prominence was checked, is what allows a firm to answer a supervisor once the campaign has come down.
Closing thoughts
The fair, clear and not misleading standard has been on the books for decades, but the Lynx decision shows it keeping step with the way marketing is now delivered. As advertising moves into formats that resize and rearrange themselves from one device to the next, placing a warning once and trusting it to hold is no longer enough. The warning has to stay visible wherever the communication comes to rest. Drafting an accurate risk disclosure is the straightforward part. Making sure it is actually seen is where the work now lies, and it is what supervisors are testing.
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References:
(1) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (MiFID II), in particular Article 24(3), under which all information addressed by an investment firm to clients, including marketing communications, must be fair, clear and not misleading.
(2) Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU, in particular Article 44 on the fair, clear and not misleading standard for information to clients, and specifically Article 44(2)(c), which requires a risk indication to use a font size at least equal to the font size predominantly used throughout the information and a layout that safeguards its prominence.
(3) Netherlands Authority for the Financial Markets (AFM), administrative penalty decision (boetebesluit) concerning Lynx B.V. of 17 April 2025, upheld on objection on 15 October 2025 and not appealed. The AFM imposed a fine of EUR 300,000, reduced from a statutory base of EUR 500,000, for breaches of Article 44(2)(c) of Commission Delegated Regulation (EU) 2017/565 in advertising in the period 1 December 2023 to 24 February 2024, with the homepage captured on 19 March 2024.
