Firms will be required to apply to the FCA to continue approving adverts
The Financial Conduct Authority (FCA) has announced the introduction of new screening checks for firms that approve financial adverts.
Aiming to help people make informed decisions to save, invest, and borrow with confidence, the regulator will be requiring firms approving financial marketing for unregulated firms to demonstrate that they have the necessary skills and expertise to approve adverts and that they understand the product to ensure the promotion is accurate and fairly balances risk and reward.
Previously, any firm authorised by the FCA could approve promotions on behalf of firms unregulated by the FCA. This has caused harm, according to the regulator, with firms approving adverts for products they do not understand, as well as adverts that are unclear, unfair, or misleading.
Firms will need to apply to the FCA between November 6, 2023 and February 6, 2024 to continue approving adverts ahead of the new rules coming into force on February 7. Firms who have submitted an application can continue to approve adverts after this window until they receive a decision on their application.
FCA to roll out tougher rules on financial product adverts https://t.co/lfpdS1TLmD
— FTAdviser (@FTAdviser) September 12, 2023
In addition, firms approving financial promotions will be required to report regularly on what they sign off and on any concerning adverts they cancel approval for.
“By introducing these new checks, we will ensure people approving adverts have the right skills and understanding they need to do so,” stated Sarah Pritchard, executive director of markets at the Financial Conduct Authority.
“Firms need to make sure people are equipped with the right information at the right time, so they can make properly informed decisions. As we face the rising cost-of-living, consumers are having to make difficult decisions about their finances and how they pay for things, so this is more important than ever.”
As part of its three-year strategy, the FCA said it was committed to setting and testing higher standards across financial services to give consumers the confidence to make good financial decisions based on accurate and relevant information. This is underlined by Consumer Duty, which was designed to boost consumer protection in financial services.
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