FCA Requirements Of Firms To Change Or Discontinue Promotions
What has happened?
In February 2023, the FCA announced in its data analysis of 2022 financial promotions, that it had required firms to amend or remove 8,582 financial promotions during 2022, 14 times as many as in 2021, and that it remains concerned regarding the levels of compliance in this area.
What are the key points of this announcement?
The FCA states that it has made significant improvements to the digital tools it uses to identify problem firms and misleading promotions. These improvements have enabled it to work through a much larger number of cases than before. During 2022, it assessed around 180,000 websites, which resulted in just over 4,500 websites and social media platforms being reviewed. This led to 1,441 alerts being issued and approximately 400 of the offending websites being taken down.
‘Influencers’ have also been a growing concern for the regulator. Unauthorised individuals should not advise people on the merits of regulated investment (and authorised firms should not use them) and the FCA has acted against several social media influencers over the past year. In one case reported on, the FCA identified that a director of a regulated credit broking firm was using a personal profile to promote the advice of unauthorised traders and other financial products. The FCA blocked the use of personal social media to promote financial services and imposed a requirement on the firm in question to halt any financial services promotions.
2022 saw the FCA significantly increase its intervention activity in response to poor financial promotions compliance in authorised firms and activity involving unauthorised firms and individuals.
In relation to authorised firms, following intervention, in 2022 the FCA had 8,582 promotions amended/withdrawn compared to 573 in 2021, while in relation to unauthorised firms and individuals, it issued 1,882 alerts in 2022, an increase of 34% from 1,410 in 2021.
Additionally, it accepted voluntary requirements from 12 firms and used its own initiative powers on one firm, restricting its ability to communicate or approve financial promotions.
How can we help you?
Thistle Initiatives has supported firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as and when our team of specialists can serve as your right hand in a meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.
Has anything discussed in the article raised questions you want answered? Contact our specialist financial promotions advisory team now to schedule a free consultation. Get in touch with us by calling 0207 436 0630 or sending an email to info@thistleinitiatives.co.uk.