On 6 December 2022, the FCA published Consultation Paper CP22/27: Introducing a gateway for firms who approve financial promotions.
Under current legislation, any FCA authorised firm is allowed to approve financial promotions on behalf of other firms who are not authorised by the regulator. Changes being introduced by Parliament will require authorised firms to undergo new screening checks before they are allowed to approve financial promotions. This will give the FCA greater oversight to stop harm before it occurs.
Firms will also be required to regularly report to the FCA on financial promotions they have approved, this is intended to help the FCA crack down on rogue adverts.
The proposed reforms will help ensure the FCA can act quickly to put a stop to harmful financial promotions communicated by unauthorised firms, including areas such as high-risk investments and Buy Now Pay Later. CP22/27 supports these proposed legislative changes and sets out how the FCA plan to operationalise the new gateway.
The FCA is consulting on the following In order to operationalise the new gateway:
- how the FCA will assess applicants at the gateway;
- the basis for the FCA granting or refusing an application;
- 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 the Financial Ombudsman Service to the approval of financial promotions; and
- further consequential changes made to FCA non-Handbook guidance for firms that approve financial promotions for investments, and additional text on the Consumer Duty
The deadline for feedback to CP22/27 is 7 February 2022.
