Treasury looks to strengthen FCA’s oversight of unauthorised firms’ adverts

21st July 2020

HM Treasury has opened a consultation seeking to strengthen the regulatory regime governing financial promotions issued by unauthorised firms in order to give greater protection to consumers from misleading and inadequate adverts.

Under the current regime for financial promotions, if an unauthorised firm wants to promote a particular financial product, they need to get that promotion approved by any authorised firm.  The government believes that this no longer provides consumers with sufficient safeguards given the variety and vast quantity of products being offered in today’s financial services market.

The consultation paper, entitled Regulatory Framework for Approval of Financial Promotions, proposes strengthening the Financial Conduct Authority’s (FCA) ability to ensure the approval of financial promotions operates effectively.  The government proposes to establish a regulatory ‘gateway’, which a firm must pass through before it is able to approve the financial promotions of unauthorised firms. Any firm wishing to approve the financial promotions of unauthorised firms would first need to obtain the consent of the FCA.

The paper’s proposals would mean that authorised firms will now have to obtain specific FCA consent to approve the financial promotions of unauthorised firms.  This would mean the FCA can have better oversight of those firms which would help ensure such promotions are clear, fair, and not misleading.

Members may access the document by clicking here.

The consultation period closes on at 12pm on 25th October 2020.  BIBA will be submitting an official response to this paper and members who would like their views to be taken into consideration as part of this process should send them to David Sparkes at [email protected] by Friday 16th October.

BIBA members’ compliance and regulation queries should be directed to: [email protected].