Regulatory Framework for Approval of Financial Promotions

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 is able to 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, in this consultation the government proposes 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.

The government would be grateful for the views of stakeholders on the options set out in the consultation, and the questions set out in the consultation form. The government is looking for views from members of the public or industry, but would particularly welcome responses from retail consumers; authorised firms which have undertaken approvals of the financial promotions of unauthorised firms; and unauthorised firms which communicate financial promotions.