FCA cracks down on financial promotion approvals
The Financial Conduct Authority (FCA) is introducing new screening checks for firms that approve financial promotions.
Previously, any FCA-authorised firm could approve promotions on behalf of unregulated firms.
The regulator said that this has caused harm in the past, with firms approving adverts for products they don’t understand, as well as adverts that are unclear, unfair or misleading.
Read more: Rebuildingsociety to offer promotions advice to cryptoasset firms
Firms will now have to prove that they have the necessary expertise to approve financial promotions. They will also be required to report regularly to the FCA about what they sign off and flag any concerning adverts.
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, which come into force on 7 February. Firms which have submitted an application can continue to approve adverts after this window until they receive a decision on their application.
Read more: Regulation special report: Status: It’s complicated
“By introducing these new checks, we will ensure people approving adverts have the right skills and understanding they need to do so,” said Sarah Pritchard, executive director of markets at the FCA.
“Firms need to make sure people are equipped with the right information at the right time, so they can make properly informed decisions. As we face the rising cost of living, consumers are having to make difficult decisions about their finances and how they pay for things, so this is more important than ever.”
It is also reforming social media guidance for financial promotions.