An affiliate you have never met records a two minute clip in a language nobody on your compliance team reads, drops your tracking link in the description, and sends you eleven funded accounts that week. The revenue lands in your reporting as clean acquisition cost. The clip says the strategy cannot lose. When a regulator eventually watches it, the question is not whether you wrote the script. It is whether the promotion was made on your behalf, and it plainly was.
That is the whole of the issue, and most partner programmes are built as though it were not.
Where the liability actually sits
Across the main regulated markets the principle repeats: a financial promotion communicated on behalf of a licensed firm is the firm's communication. Under the European framework a firm is answerable for marketing material issued in its name, and where a partner is formally appointed as a tied agent the firm takes unconditional responsibility for everything that agent does within scope. The MiFID II conduct rules do not offer a category called "someone we pay but do not control".
The UK went further by restricting who may approve a promotion at all. An authorised firm now needs a specific permission before it can approve financial promotions for unauthorised persons, which removed a common workaround where a small authorised entity signed off marketing for a stream of third parties. The direction of travel is the same everywhere: the licence holder approves, the licence holder monitors, the licence holder answers.
Paying on performance changes nothing. A commission structure is a commercial arrangement between you and the partner. It has no effect on whether the regulator treats the partner's output as your promotion, and an indemnity clause against an offshore individual with no assets is a piece of paper, not a control.
Three partner types, three exposures
Firms lump these together in one "partners" tab and then wonder why the risk profile is uneven. They are different animals.
| Type | What they actually do | Main exposure |
|---|---|---|
| Affiliate / publisher | Content and paid traffic, tracking link, no client contact | Claims in the creative, missing risk warnings, targeting a restricted country |
| Introducing broker | Ongoing relationship, answers client questions, discusses accounts | Unlicensed advising or arranging; handling money; onboarding by proxy |
| Influencer / community owner | Personal endorsement to a following, often on Telegram or short video | Undisclosed payment, performance claims, results from unverifiable accounts |
The introducing broker model carries the most regulatory weight because contact is the trigger. Passing a link is marketing. Telling a client which instrument to trade or which account type suits them is, in most jurisdictions, a licensed activity, and it cannot be subcontracted to a partner who does not hold the permission. Some regimes solve this with a tied agent or appointed representative register, which brings the partner formally inside the firm's supervision. Others simply prohibit the arrangement.
The claims that reliably cause trouble
Supervisors are consistent about what they object to. Guaranteed or implied guaranteed returns. Screenshots of profit without the loss context and without a statement that individual results differ. Language that presents leveraged trading as easy income. Risk warnings that appear only at the end, in grey, at half the size of the promise. Bonus offers in jurisdictions where deposit-linked bonuses are banned. Comparison claims about spreads or execution that the firm cannot evidence. Most of this is covered in the specific CFD marketing restrictions that apply to retail communications.
The failure mode is rarely a partner deciding to break rules. It is a partner who has never been told what the rules are, working from a creative pack that was written for a different jurisdiction two years ago.
Controls that hold up when someone asks
Five things make a partner programme defensible, and none of them are exotic. First, know your business checks on every partner before the link is issued: entity documents, beneficial owner, sanctions screening, and the countries they intend to promote in. Second, a versioned creative library, where the approved assets are the only assets, and each version carries the date it was signed off and the jurisdictions it clears.
Third, monitoring with teeth. That means a scheduled review of what each partner actually publishes, translated where needed, with the finding written down. A programme that has never suspended a partner has never monitored one. Fourth, contractual terms that give you the right to demand removal within a stated period and to withhold commission for breach, plus a clean termination right. Fifth, jurisdiction blocking that works at the traffic level, so a partner promoting into a restricted country cannot convert that traffic even if they try.
Sub-affiliate structures make all five harder, because the firm's visibility usually stops at tier one while its liability does not. If you run multi-level partner tiers, the due diligence obligation follows the chain down, and the practical answer is to cap the depth rather than to promise monitoring you cannot perform.
What this means for the systems
Every one of those controls is a data problem before it is a policy problem. You need a partner record with documents and approval status attached, unique tracking links so any registration can be traced back to the exact source, per-partner country restrictions enforced at sign-up rather than after the deposit, and an audit trail showing which creative version was live on which date. When a supervisor asks who introduced a specific complainant in March, "we think it was one of the Telegram partners" is the answer that turns a query into an investigation.
This is the part we build into the broker CRM: partner records with their own documents and status, tracked links tied to registrations, and commission rules configurable per entity so a group running a European licence alongside an offshore one does not accidentally apply one jurisdiction's payout model to the other. The compliance work stays yours. The evidence should not have to be reconstructed from a spreadsheet.
"There is no such thing as an affiliate's compliance breach. There is only your compliance breach, committed by someone you paid."
— Roman Onta, Executive Director, SINGUARD
Key Takeaways
- A promotion made on behalf of a licensed firm is the firm's promotion, and a performance-based commission structure does not shift that.
- Client contact is the line: passing a link is marketing, discussing instruments or account types is usually a licensed activity.
- A defensible programme needs partner due diligence, a versioned creative library, real monitoring, termination rights and enforced country blocking.
- Sub-affiliate tiers extend liability past the point where most firms can see, so cap the depth instead of promising oversight you cannot deliver.
Frequently Asked Questions
Is a broker responsible for what its affiliates publish?
In the major regulated markets, yes. A promotion made on behalf of a licensed firm is treated as that firm's communication, whoever typed it. Regulators expect the firm to approve marketing material before it goes out, to monitor what partners actually publish, and to end the relationship when a partner will not comply. Paying on results does not transfer the obligation to the partner.
What is the difference between an introducing broker and an affiliate?
An affiliate usually publishes content and passes traffic through a tracking link with no contact with the client afterwards. An introducing broker maintains a relationship, answers questions and often discusses instruments or account types. That contact is what raises the regulatory exposure, because advising on or arranging deals in investments is a licensed activity in most jurisdictions and cannot be delegated to an unlicensed partner.
Can a broker pay affiliates a revenue share on client losses?
Some jurisdictions restrict or prohibit remuneration models that pay a partner more when clients lose, on conflict of interest grounds, and supervisors look closely at any incentive that rewards volume of trading rather than quality of client. Firms operating across several regimes usually keep the model configurable per entity and per partner, and document why the chosen structure does not conflict with the duty to act in the client's best interest.