FCA consults on how financial promotions requirements apply to social media

FCA is consulting on guidance on how its financial promotion requirements apply to promotions made on social media.

Financial promotion rules are designed to be technology-neutral and apply to all channels used to advertise. The Consumer Duty is also set to strengthen FCA’s expectations in relation to firms that communicate or approve financial promotions. Unauthorised persons, such as social media influencers, who promote regulated financial products or services without the approval of an FCA authorised firm or individual may be committing a criminal offence.

FCA proposes to retain the key principles and expectations for financial promotions to be standalone complaint. However, it will use the guidance to clarify how it expects those principles to be applied to different social media marketing channels, as well as looking to address specific design features which act to obscure required information. It will also provide guidance on emerging marketing trends such as affiliate marketing.

FCA published guidance in 2015 on its approach to the supervision of financial promotions in social media, but the use of online platforms to promote financial products has developed considerably since then. For example, that guidance is heavily based around character-limited media such as Twitter, and does not consider influencers communicating financial promotions. FCA plans to retire the 2015 guidance when the new guidance is finalised.

The consultation closes on 11 September 2023.

Laura Wiles