Compliance
Compliance Corner: Financial Conduct Authority Tightens Screws On Adverts
The latest compliance news: regulatory developments, punishments, guidance, permissions, new product and service offerings.
Financial Conduct Authority
The UK’s Financial
Conduct Authority is rolling out new screening checks for
firms that approve financial adverts, amid concerns about
potential misleading ads.
Firms approving financial marketing for unregulated firms will
have to demonstrate that they have the “necessary skills and
expertise to approve adverts,” the watchdog said in a
statement yesterday. “Those signing them off must understand the
product to ensure the promotion is accurate and fairly
balances risk and reward,” it continued.
Previously, any firm authorised by the FCA could approve
promotions on behalf of firms unregulated by the FCA. “This has
caused harm, with firms approving adverts for products they don’t
understand, as well as adverts that are unclear, unfair or
misleading,” the FCA said, without naming specific
examples.
In August 2022, the FCA said it intervened in “significantly more
financial promotions to prevent harm.” In the year to the
end of July 2022, 4226 adverts were amended or withdrawn after
intervention from the FCA.
Firms will need to apply to the FCA between 6 November 2023 and 6
February 2024 to continue approving adverts ahead of the new
rules coming into force on 7 February. Firms that have applied
can continue to approve adverts after this timeframe until
they receive a decision on their application.
