Treasury consults on fin proms approval ‘gateway’

Treasury consults on fin proms approval ‘gateway’

Financial Services analysis: Legal Director Emma Radmore of Womble Bond Dickinson discusses the recent consultations from the HM Treasury on the approval of financial promotions and promotion of cryptoassets.

HM Treasury consultation on approval of financial promotions

HM Treasury is consulting on a fundamental change to the rights of authorised firms to approve financial promotions of unauthorised firms. Both it and the Financial Conduct Authority (FCA) have become increasingly concerned that some authorised firms are approving financial promotions in areas where they do not have the knowledge or competence to properly comply with their obligations under the applicable conduct of business rules. As a result, promotions often fail the ‘clear, fair and not misleading’ test, which can lead to direct customer losses, and also indirect losses if customers are diverted away from more suitable products or lose trust in the system. The FCA’s intervention action on the approval of financial promotions for mini-bonds to retail investors is a case in point.

But the FCA cannot systematically check, or know, whether a firm is competent to approve financial promotions, so Treasury proposes a change to the law. It proposes 2 options, both of which will involve a change to section 21&nb

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