Following Treasury’s 2020 consultation, the FCA has launched its own consultation on the introduction of a gateway for firms who wish to approve financial promotions on behalf of unauthorised persons. The paper sets out the FCA’s proposals on:
- how it will assess applicants 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 that are 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 FOS to the approval of financial promotions; and
- further changes to FCA’s non-Handbook guidance for firms that approve financial promotions for investments, and additional text on the Consumer Duty.
The proposals will require firms to demonstrate they have adequate expertise for the promotions they wish to approve. The measures will also ensure that the FCA can act quickly to stop harmful promotions being issued by unauthorised firms, including in areas such as BNPL and high-risk investments.
The consultation closes on 7 February 2023.