According to the UK market watchdog, advertising is one of several key factors contributing to poor financial and investment decisions.。As a result, the UK's Financial Conduct Authority (FCA) will take more steps this year to ensure accurate publicity and balance risk and return for domestic investors.。

FCA Releases New Rules for Advertising Approval

Previously, any company authorized by the FCA could approve ads from regulated companies, a lax policy that led to the approval of misleading or unclear ads in retail transactions.。Now every company has to prove that they understand the products they promote。

The company's application window for this new rule starts on November 6, 2023 and ends on February 6, 2024.。The new rules will come into force on February 7, 2024.。Companies applying within this window may continue to approve ads until they receive a decision on their application。

In addition, these companies are required to submit regular reports on the ads they have approved and those they have rejected, enabling the FCA to take swift action against illegal advertising.。

"By introducing new inspections, we will ensure that approvers have the required skills and understanding," commented Sarah Pritchard, Executive Director of Marketing at FCA.。"Companies need to make sure people are getting the right information at the right time so they can make the right informed decisions."。

The changes will affect a range of financial firms, including cryptocurrency entities such as Binance, super-finance apps such as Revolut, and vendors in other financial sectors such as Adyen and Nubank.。

As mentioned earlier, this is not the first time in recent months that UK regulators have reviewed advertising for financial products and services.。The idea of cracking down on rogue financial advertising was first discussed at the end of 2022, and now the latest regulations are coming into effect。

A month ago, the FCA released financial promotions data for the second quarter。Figures from April to June 2023 show that 1,507 promotions were modified or withdrawn by regulated entities following the intervention of the FCA.。In addition, the FCA issued 400 warnings to unauthorized companies and individuals, 11% of which were cloning scams.。

Last year, the FCA blocked or forced 1,400% more rogue financial ads than the previous year。

FCA's broader consumer protection strategy

The move is part of the FCA's three-year strategy to set higher standards for the financial services industry as a whole, strengthening protections for consumers by ensuring they have access to accessible information.。

This latest move by the FCA is the embodiment of "consumer responsibility" in action。It marks a major shift in the FCA's approach to financial promotion - it is no longer enough to approve companies for proper authorization。Now, it must go further and actively demonstrate its ability to approve specific financial promotions, "said Claude Brown, a partner at Reed Smith.。

The Financial Services and Markets Act 2023 creates a new gateway for companies wishing to approve advertising from unregulated entities, following the FCA's December 2022 consultation.。Businesses can apply after the February deadline, but cannot approve ads until the application is processed。New entrants to the market can apply as part of the standard authorization process。

As part of its latest efforts, the FCA aims to regulate illegal promotion on "finfluencers" and social media.。The regulator also reminded cryptocurrency companies that the latest regulations on the financial promotion regime will have a significant impact on their current business and reminded them to be fully prepared for the upcoming rules.。