FCA Drops New & Stronger Rules!

　　According to the press releases released on Tuesday (Dec. 6 2022), any business that has been granted FCA authorisation is currently able to approve financial promotions made on behalf of unlicensed businesses. In order to ensure that licenced entities properly approve promotional campaigns, Parliament made some changes to the law. These changes mandate that licenced entities go through a new assessment. The FCA seeks to lessen the detrimental effects of rogue advertising content's presence in public areas by increasing its oversight of it.

　　The Financial Conduct Authority (FCA) of the United Kingdom does not create law; rather, it only enforces it. However, the document highlights ongoing legislative efforts to bring both sectors under its regulatory purview.

　　The buy now, pay later (BNPL) loan providers, and crypto asset service providers are the targets of the proposals. Following a government review of the BNPL market, the Treasury recommended in June that BNPL lenders be subject to similar regulation to other lenders. The recommendations included giving the FCA authority to monitor the market and enforcing regulations to stop predatory behaviours like the use of deceptive advertising.

　　The U.K. government has decided to use the Financial Services and Markets Bill (FSMB) as the legislative vehicle to enact the new regulations for both BNPL and crypto advertisements.

　　With the proposed legal change, the FCA will be able to take action against unauthorised businesses, including those in the high-risk investment sector, even faster and with greater effectiveness. In order to help identify poorly designed and deceptive campaigns, companies are required to report what promotions they have approved on a regular basis, according to the FCA announcement.

　　The FCA will have the authority to regulate both BNPL lenders and crypto asset service providers thanks to recently submitted amendments to the bill, which will be discussed in Parliament on Wednesday (Dec. 7). Both groups of businesses will be subject to the same advertising regulations and standards as all FCA-regulated organisations under the new framework.

　　Currently, non-regulated businesses are permitted to advertise financial products in the United Kingdom, but only with the support of a partner who has received FCA approval.

　　Sarah Pritchard, the Executive Director of Markets Division at the FCA, social media and online advertising claimed that social media and online advertising shorten the decision-making time between seeing a promotion and acting upon it. Therefore, it is crucial to make sure that these ads are equipped with the right information to not cost expensive and regrettable mistakes.

　　The FCA reported at the beginning of November that between July and September 2022, it had intervened 4,151 times to alter the content or stop fraudulent financial promotions. The number of advertisements for risky investments is increasing, despite the regulator only having to step in 564 times during the same time period last year.

　　The FCA's larger Consumer Investment Strategy includes measures taken by the British regulator to safeguard consumers from misleading advertisements. Its objectives include boosting investor confidence, promoting investment, and lowering the number of people who have been taken advantage of by dishonest and unauthorised service providers.

　　Would you want to discover a way to easily find brokers operating under the FCA's surveillance？ If you have not paid close attention to the regulatory status of your broker(s) prior to this article, this is your reminder to do so!

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　　Opting for a licensed broker could better safeguard your trading funds and prevent you from falling into the traps of unlicensed brokers who are often in disguise as scammers.