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Currently, if an unauthorised firm wants to promote a particular financial product, they need to get that promotion approved by any authorised firm. But with the variety and vast quantity of products being offered on the market today, the government believes that this no longer provides a strong enough safeguard.
Proposals published by the Treasure on 20th July would mean that authorised firms will now have to obtain specific FCA consent to approve the financial promotions of unauthorised firms.
The aim is for the FCA to have better oversight of firms approving such promotions which it is hoped would help ensure such promotions are clear, fair, and not misleading.
Separately, the government is also consulting on whether unregulated cryptoassets should fall within the financial promotions regime. This consultation can be found here. The consultations should be read together.
It’s important that people can understand the financial products they see promoted. If adverts by unauthorised firms are misleading, or don’t fully outline the risks, then people can end up losing money. That’s why we want to put more protections in place around such financial promotions, including the promotion of cryptoassets, while continuing to ensure people have access to a wide range of products on the market. John Glen, the Economic Secretary to the Treasury & City Minister
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