FCA Proposes Stricter Regulations To Protect Consumers

Dec 9, 2022 12:57:34 PM

What has happened?

In December 2022, the FCA proposed new measures to clamp down on illegal, unfair or misleading financial promotions. It has outlined new checks for firms that want to approve financial promotions. With the new measures, firms will have to prove they have the correct expertise in order to approve promotions.

What do you need to do?

Under current legislation, any FCA authorised firm is allowed to approve financial promotions compliance on behalf of other firms that are not authorised. Changes being introduced by Parliament will require authorised firms to undergo new screening checks before they are allowed to approve financial promotions. This will allow the FCA to have greater oversight to stop harm before it occurs.

Firms will also be required to report to the FCA within seven days on every financial promotion that they approve and biannually on financial promotions they have approved, helping the FCA to prevent rogue advertising.

The proposed reforms are intended to ensure that the FCA can act quickly to stop harmful financial promotions communicated by unauthorised firms, including those in high-risk areas such as the investments and Buy Now Pay Later sectors.

The publication builds on the FCA’s recent work on strengthening rules around advertising for high-risk investments and being more assertive in removing misleading advertising, with the FCA removing or amending over 5,000 financial promotions from authorised firms between January and October in 2022, compared to 564 in 2021.

How can we help you?

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

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