Context
The current requirement for an authorised firm to approve the financial promotion of an unauthorised firm may not operate as a strong enough safeguard to ensure such financial promotions are compliant with FCA rules that they are fair, clear and not misleading.
Currently, any authorised firm can approve any financial promotion of an unauthorised firm. There is no specific process through which a firm must be assessed as suitable and competent before it is able to approve the financial promotions of unauthorised firms.
In order to strengthen the FCA’s ability to ensure the approval of financial promotions operates effectively, the government consulted and proposed to establish a regulatory ‘gateway’, which a firm must pass through before it is able to approve the financial promotions of unauthorised firms. Any firm wishing to approve the financial promotions of unauthorised firms would first need to obtain the consent of the FCA.
Key points to note
- The Consultation ran from 20th July 2020 to 26th October 2020, and details were included in an earlier UKGI Weekly Update.
- After carefully considering all responses, the government intends to bring forward legislation to implement a regulatory gateway when parliamentary time allows
- The regulatory gateway will be implemented through the imposition of requirements (option 1 set out in the response document)
- The government has also developed proposals to implement a transitional period allowing an orderly transition between the two regimes
Next actions
None – provided for information and awareness.