On 12 September 2023, the FCA published policy statement PS23/13: Introducing a gateway for firms who approve financial promotions. PS23/13 sets out the FCA’s final policy position and near final rules and guidance on the gateway, which was introduced by the government through the Financial Services and Markets Act 2023.
Once the new gateway comes into effect, all authorised persons wanting to continue to approve financial promotions for unauthorised persons will need to apply to the FCA for permission to do so, subject to certain exemptions. Authorised persons that only approve their own financial promotions for communication by an unauthorised person, the financial promotions of their appointed representatives for the regulated activities they have accepted responsibility for, or the financial promotions of unauthorised persons within their corporate group, will not need to apply for permission under the new regime.
The FCA notes that it has made several targeted changes to its proposals (in CP22/27, published in December 2022) for how to implement the gateway, in response to consultation feedback. The finalised approach, set out in PS23/13, includes:
- How the FCA will assess applicants at the gateway and its basis for granting or refusing applications.
- Reporting requirements for firms that are granted permission to approve financial promotions.
- Not extending the compulsory jurisdiction of the Financial Ombudsman Service to the approval of financial promotions.
- Updates to the FCA’s non-Handbook guidance for firms that approve financial promotions for investments.
- A review of the FCA’s approach within 24 months of the rules coming into force.
Next steps
Firms should consider whether there is a need for them to apply to continue to approve financial promotions for unauthorised persons.
The FCA intends to enable firms to submit applications for permission to approve financial promotions from 6 November 2023, and that initial application period will close on 6 February 2024. On the following day, 7 February 2024, the new legislation will be implemented and firms that have not applied to the gateway will no longer be able to approve financial promotions (subject to exemptions). Firms that do apply at the gateway during the initial application period, however, will be able to continue approving financial promotions for unauthorised persons while the FCA determines their application.
Any firms that do not apply at the gateway during the initial application but wish to approve financial promotions in the future can apply for permission to approve using a variation of permission form. However, they will not be able to approve financial promotions until the FCA has determined their application as successful.
Applicants for Part 4A permission will also be able to begin applying for permission to approve financial promotions from 6 November 2023.
Further information on applying to approve financial promotions for unauthorised persons is set out on a new FCA webpage, and the questions that applicants will be asked in the application are listed in Annex 1 and 2 of PS23/13.
