The Financial Conduct Authority (FCA) has announced its crackdown on misleading financial promotions just days after a financial professional body urged the UK government to tighten the rules around the marketing of unregulated products.
During an Freedom of Information (FOI) request, the FCA said, between 1 January 2019 and 1 August 2020, it had contacted 55 authorised firms to ask them to amend or withdraw promotions that they had approved, because it had concerns that the promotions may have been “unclear, unfair or misleading”.
The FCA said that it has not taken any enforcement action against firms or individuals for approving the communication of misleading or inaccurate financial promotions for the period, but it has a “number of ongoing investigations, where the suspected misconduct relates in some way to the communication of financial promotions”.
Range of activities
The watchdog said in a statement: “The FCA carries out a range of activities to protect consumers from misleading financial promotions.
“For example, the FCA has placed restrictions on the financial products that can be promoted to retail consumers, it maintains rules regarding the content of financial promotions, which it supervises actively, and it authorises the firms which approve the communication of financial promotions by unauthorised firms.
“When these firms approve the communication of a financial promotion, they must ensure that the promotions comply with the FCA’s rules, both in presentation and in substance. “
Under the FCA’s remit
This news comes days after the Personal Investment Management & Financial Advice Association (Pimfa) urged the UK government to tighten the rules around the promotion of unregulated financial products.
It said that the practice should become a regulated activity and fall under the FCA’s remit.
One of the most recent scandals in this sector is London Capital & Finance (LCF), where over 11,600 retail investors were mis-sold £237m ($307m, €260m) in mini-bonds through the unregulated marketing of such products.
