The Financial Conduct Authority‘s (FCA) recent letter to the House of Commons Work and Pensions Committee exposes flaws in our approach to financial promotions regulation and grey areas in how the rules are defined.
The Financial Services and Markets Act 2000 states that only a firm authorised by the FCA may issue or approve a financial promotion.
However, there are exemptions within the Financial Promotions Order (FPO) that allow unauthorised firms to issue promotions in specific circumstances. Financial promotions made to high net worth individuals and sophisticated investors are subject to such an exemption, for example.
Vulnerabilities in the financial promotion regime laid bare
In a letter to the House of Commons Work and Pensions Committee, FCA chief executive Nikhil Rathi calls for reforms to the legislative framework relating to financial promotions, and specifically the FPO.
Quite rightly, the FCA considers that exemptions within the FPO…