Enforcement action for non-compliant financial promotions
Enforcement action for non-compliant financial promotions

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

  • Enforcement action for non-compliant financial promotions
  • FCA approach on the supervision of financial promotion
  • FCA regulatory tools for intervention
  • Financial promotions: Enforcement actions
  • What can firms do to improve compliance?

FCA approach on the supervision of financial promotion

This Practice Note provides information on how the Financial Conduct Authority (FCA) ensures that financial promotions issued by firms are compliant with its rules, and includes examples of enforcement action when non-compliant promotions have been identified. For more information about the financial promotion regime more generally, see Practice Note The financial promotion regime—essentials.

FCA has a risk-based / judgment approach to the supervision of firms. The FCA’s approach to conduct supervision, which includes how firms comply with rules relating to the issuance or approval financial promotions, is split into three pillars:

  1. pillar 1—proactive supervision for the biggest firms

  2. pillar 2—event-driven, reactive supervision of actual or emerging risks according to our risk appetite

  3. pillar 3—thematic work that focuses on risks and issues affecting multiple firms or a sector as a whole

Furthermore, all authorised firms have also been allocated in to one of two conduct categories:

  1. (1) fixed portfolio firms

  2. (2) flexible portfolio firms

For further information on the FCA’s conduct categorisation of firms, see Practice Note: FCA supervisory approach.

The FCA regulates financial promotions by a variety of means including swift direct intervention with firms to force the immediate amendment or withdrawal of misleading promotions under its section 137S FSMA powers. The FCA website contains further information on how it engages these powers. Where potential detriment has already arisen, the FCA asks

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