Financial Promotions — FCA’s Concerns
The FCA has recently published a “Dear CEO” letter relating to “clear, fair and not misleading” standards in financial promotions (fca.org.uk/publication/correspondence/dear-ceo-letter-promotions-regulated-unregulated-business.pdf). This letter is relevant to all regulated firms.
What Is the FCA Saying?
The FCA has recently identified a trend in financial promotions issued by firms that identify both regulated and unregulated business activities. Whilst there is nothing wrong in this per se, there is an increasing incidence of such promotions also including a statement that the firm is authorised and regulated by the FCA thereby implying, or at least it can be inferred by the audience, that the FCA also regulates the unregulated business.
The rules in this area are clear in that where there is reference to regulation by the FCA and where the financial promotion includes reference to unregulated activity, it should be clear that such activities are not regulated by the FCA. This clarity is increasingly missing.
What Is the FCA Asking Firms to Do?
The FCA has reminded firms that the FCA does not approve financial promotions. It is asking firms to meet their obligations to ensure that all financial promotions are clear, fair and not misleading and that firms must confirm (approve) that promotions comply with the rules on financial promotions generally.
What Should You Do Now?
The scope of financial promotions is very wide and, in addition to “traditional” methods, include website and social media communications. As such, all communications are capable of being a financial promotion meaning that firms need to be very careful to ensure that they have robust procedures to identify all financial promotions and to ensure that they are compliant.
Firms should review their financial promotion procedures for identification, notification and approval purposes and ensure that not only is the specific issue raised by the FCA addressed correctly but also that all other requirements of the financial promotion approval process and the promotions themselves are fully in compliance with regulatory rules and expectations.
How Can We Help?
Complyport and its staff have a wealth of experience in reviewing financial promotions and can do so on a one-off or on an ongoing basis. We can provide you with the necessary assurance to be able to approve your promotion safe in the knowledge that it meets regulatory expectations and rules.
We are also skilled in reviewing and assessing your financial promotion procedures and can assist you to establish the necessary framework to ensure future compliance with the requirements of the FCA.
Contact us now on 020 7399 4980 or email us at firstname.lastname@example.org for more information on how we can assist you to meet your regulatory obligations.
The full details of the Dear CEO letter are at fca.org.uk/news/news-stories/dear-ceo-letter-financial-promotions.
You can of course contact your usual Complyport consultant with any queries you may have on 020 7399 4980 or email us at email@example.com.