FCA sounds warning over unregulated investment promotions

By Justin Cash

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Jan 14, 2019
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The FCA has warned firms not to imply that all of their activities, including unregulated investments, are authorised by the FCA in marketing material if they are not actually regulated.

In a letter to chief executives of all regulated firms, the FCA outlines its rules on making sure financial promotions are fair, clear and unambiguous, having noted examples where marketing material had suggested all activities from some firms fell under FCA regulation when they did not.

FCA director of supervision Jonathan Davidson says: “It is completely unacceptable for firms, which are regulated for some of their business, to market unregulated investments by implying to customers that all their business is regulated.

“We are committed to stamping out this misleading practice and recommend that customers should ask firms whether what they are buying is really regulated by the FCA.”

The letter reminds chief executives that while it does not approve adverts, the FCA does regulate invitatations to engage in investment activity as well as investment conduct itself, and monitors adverts across the UK as part of this.

The regulator says that to meet the FCA’s standards on financial promotions, firms must ensure customers “understand the extent of the relevant firm’s business that is regulated”.

The letter, which is signed off by FCA chief executive Andrew Bailey, reads: “We make clear in our handbook that if a firm names the FCA and/or the Prudential Regulation Authority as its regulator in a financial promotion that refers to aspects of its business (e.g., products or services) which are not regulated by the FCA and/or the PRA, then the promotion should make clear those aspects which are not regulated.”

The FCA also reminds firms it has the power to force them to take down adverts or prevent them being put up if it discovers breaches of its rules.

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John 6 months ago

Go to the profile of John
John 6 months ago