The UK’s Financial Conduct Authority (FCA) has published a letter addressed to the chief executives of regulated firms reminding them of their responsibilities surrounding financial promotions.
The letter emphasised that the firms, including those regulated by the Prudential Regulation Authority (PRA), must abide by promotion regulation and standards.
Andrew Bailey, chief executive of the FCA, said in the letter that the regulator had “recently become aware of firms issuing financial promotions which suggest or imply that all of the activities which they undertake are regulated by us and/or the PRA when they are not.”
Removal powers
Under the current regulation, financial promotion that does not abide by existing regulations is considered “unlawful”.
When that happens, the regulators have the power to “direct a firm to withdraw an advert (or its approval of an advert), or to prevent it from being used in the first place”.
This power is set out in the Financial Services and Markets Act 2000.
“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,” said Jonathan Davidson, executive director of supervision – retail and authorisations at the FCA.
“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.”
“At Praemium we take the marketing of financial products very seriously,” said Ben Lester, head of sales, describing the firm’s marketing process as robust. “Complying with these rules is not a challenge and nor should it be for any firm, especially where there is a focus on providing clarity and ease of understanding for the client.”
