Financial promotions quarterly data 2022 Q2

Written by Thistle Initiatives - Compliance consultancy | Jul 27, 2022 11:00:00 PM

What has happened?

In July 2022, the FCA issued data, covering 01 April 2022 to 30 June 2022, concerning its most recent action against authorised firms breaching financial promotion rules and its referrals and investigations into unregulated activity.

What are the details of the fines?

In 2022 Q2, the FCA reviewed 451 financial promotions.¹

¹ 45% from proactive monitoring, 24% from consumers, 15% from different areas of the FCA, 10% from UK regulators, and 6% from firms

This engagement resulted in 374 amends/withdrawals by 24 firms.
Retail investments and retail lending are the sectors with the highest amend/withdraw outcomes, amounting to 83% of interventions with authorised firms. 58% of these involved websites or social media promotions.
Some of the most common breaches involved credit brokers, mortgage intermediaries, and investment platforms.
2 Voluntary Applications for Imposition of Requirements (VREQs) were approved, restricting the firms’ ability to communicate or approve financial promotions.
The FCA has issued a Dear CEO letter, warning almost 28,000 lenders and brokers to stop using misleading terms in their advertising or face regulatory action. The FCA has been undertaking proactive monitoring, which will continue into 2022 Q3, and if firms fail to comply, it will take action which could include banning adverts or requiring firms to change, amend or withdraw them.

The FCA expects authorised firms issuing and/or approving financial promotions to take responsibility for making sure all communications of financial promotions are clear, fair and not misleading and otherwise comply with the COBS rules. This can also include oversight of appointed representatives or introducer appointed representatives, and marketing across all media platforms such as websites, paid-for Google ads, and social media sites.

Unauthorised firms

In 2022 Q2, the FCA received 6,010 reports about potential unauthorised businesses. It issued 286 alerts about unauthorised firms and individuals. Many of these involved breaches of the financial promotion restriction online. In almost all cases, the FCA asked for the websites to be taken down.

How the FCA acts

For authorised firms, tools used include the imposition of voluntary requirements (VREQs) or using powers to impose own initiative requirements. The firm which has communicated or approved the promotion then has to withdraw or change it to comply with the requirements. In the most serious circumstances, the FCA will use its powers under s137S of FSMA to ban a promotion or advert.

The FCA conducts proactive daily monitoring to identify websites containing illegal promotions and takes prompt action by publishing an alert on its website, typically within 24 hours, requesting that the offending website is taken down.

How can we help you?

If you’d like to know more about how we can help you with your financial promotion arrangements, or any other regulatory compliance issues, our specialist team is here to help.

View full post