Approval of promotions
Approval of promotions

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Approval of promotions
  • Approval by an authorised person
  • Communicating promotions
  • Relying on another firm's confirmation of compliance
  • Communications on behalf of overseas persons
  • What are the penalties for breaching the financial promotion regime?

This Practice Note explains the process for the approval by authorised of financial promotions under section 21 of Financial Services and Markets Act 2000 (FSMA 2000). For information about the financial promotion regime under FSMA 2000 s 21, see Practice Note: The financial promotion regime—essentials.

Approval by an authorised person

As alluded to above, the financial promotion restriction under FSMA 2000, s 21 does not apply where the content of a communication is approved by an authorised person.

Approval must be intended to allow unauthorised persons to transmit financial promotions without breaching the restriction. Although the requirement is that approval relates to the content of communications, approval should relate specifically to that part of a communication which promotes an invitation or inducement as opposed to the whole communication.

Before authorised persons give their approval to unauthorised persons they need to make sure that promotions comply with the relevant conduct rules contained in the FCA Handbook (eg chapter 4 of the Conduct of Business Sourcebook (COBS 4) in relation to investment business, chapter 3A of the Mortgages and Home Finance: Conduct of Business sourcebook (MCOB 3A) and chapter 2.2 of the Insurance Conduct of Business Sourcebook (ICOBS 2.2). For example, it must ensure that promotions is clear, fair and not misleading. If at a later stage they find out that promotions which they