| Link(s): | FCA outlines stronger rules to protect consumers from rogue financial promotions | FCA CP22/27: Introducing a gateway for firms who approve financial promotions | FCA |
Context
The FCA has today outlined new checks for those firms which want to approve financial promotions. The new measures will require firms to demonstrate they have the right expertise for the promotions they wish to approve.
Under current legislation, any FCA authorised firm is allowed to approve financial promotions on behalf of other firms who are not authorised by the regulator. Changes being introduced by Parliament will require authorised firms to undergo new screening checks before they are allowed to approve financial promotions, giving the FCA greater oversight to stop harm before it occurs.
Key points to note
The FCA’s consultation CP22/27 makes a number of proposals for the new gateway they will be introducing, which are:
- How applicants are assessed at the gateway
- The basis for granting or refusal of applications
- A bi-annual reporting requirement for firms that are given permission to approve financial promotions
- A requirement that firms granted permission to approve financial promotions must notify the FCA when they approve, or amend or withdraw approval of, a financial promotion, within 7 days of doing so
- Not extending the compulsory jurisdiction of the Financial Ombudsman Service to the approval of financial promotions
- Further consequential changes made to non-Handbook guidance for firms that approve financial promotions for investments, and additional text on the Consumer Duty
An authorised firm who wants to approve financial promotions for unauthorised firms will need to apply to the new gateway for permission to do so, by submitting a Variation of Permission (VOP) application through Connect.
Exemptions for authorised firms only approving financial promotions for the following purposes are proposed to be exempt from the need to apply to the gateway:
- Approving their own financial promotions for onward communication by an unauthorised firm
- Approving financial promotions for an unauthorised business in their corporate group
- Approving financial promotions for their ARs, where the promotion relates to a regulated activity for which the principal has the relevant permissions and has agreed to accept responsibility
Deadline for responses is 7th February 2023
Next actions
None – for information and awareness.