FCA consults on details of financial promotions authorisation gateway

Rules setting up new checks for firms that authorise the financial promotions of unauthorised organisations look likely to be ready by the middle of 2023. If the necessary legislative changes have been made in the Financial Services and Markets Bill, then a transition period to the new regime could begin soon after.

By Neasa MacErlean

The legislation is planned to create a new regulatory gateway for authorised firms approving financial promotions. One proposal is that firms report back to the Financial Conduct Authority on the promotions they have approved. Promotions are so widely defined by section 21 of the Financial Services and Markets Act that they can include posts by influencers and various other forms of social media promotion and advertising. The FCA believes it will be able to clamp down more comprehensively on illegal, unfair or misleading financial marketing if the gateway is established. It is especially concerned about promotions for high-risk investments and says it "frequently" sees scam adverts in this area. It also has concerns about buy-now pay-later promotions, some of which lack the required warnings.