Fundamental changes to the financial promotion regime are expected in 2021, as a result of a Treasury consultation. The FCA now publish quarterly data on the actions they’ve taken when authorised firms’ financial promotions breach their rules, having been heavily criticised by an independent review of their regulation of London Capital & Finance plc. Firms have been warned that they may be required to take remedial action if customers have acted on the basis of non-compliant promotions and suffered harm as a result.
This 3-hour online session will refresh participants’ knowledge of the financial promotion rules, update them on the outcome of the Treasury’s consultation and explore its practical implications.
It is suitable for compliance officers, marketing directors and in-house counsel at FCA authorised firms, regulatory lawyers and corporate finance practitioners. Participants will gain an in-depth understanding of the financial promotion rules and their practical effects for authorised firms and companies.
How will this session assist you?
• Key rules – We will look at section 21 of the Financial Services and Markets Act 2000, the Financial Promotion Order 2005, the Perimeter Guidance Manual and the Conduct of Business Sourcebook (COBS)
• Key changes – The Treasury are currently reviewing responses to their consultation on proposals to give the FCA better oversight of firms approving financial promotions for unauthorised persons, to help ensure that they are clear, fair, and not misleading. We will examine the changes which are made to the financial promotion regime as a result of the consultation.
• Key concepts – We will explore the main features and types of financial promotions
• Approving financial promotions – We will analyse COBS 4 obligations including:
o Requirements for fair, clear and not misleading communications and for financial promotions to be clearly identifiable
o Rules on communications including information on past, simulated past and future performance and cold calls
o Record keeping requirements
• Digital media
In April 2021, The FCA reported that, out of 105 financial promotions that they had ruled must be amended or withdrawn in Q1 2021, 75% related either to website or social media promotions
We will examine:
o FCA guidance on financial promotions in social media, including its views on adopting a ‘click through approach’ instead of the current ‘standalone compliance’ requirement
o FCA insights on whether risk warnings really work and the effects of tweet risk warnings
• Key exemptions – We will consider:
o Exemptions available under the Financial Promotion Order 2005
o Feedback to the FCA’s Call for Input in September 2020, which highlighted concerns about the high net worth and sophisticated investor exemptions
The session will conclude with a look at recent FCA proceedings against firms which breached the financial promotion rules.
Hannah Doherty has 25 years’ private practice experience as a corporate, capital markets and financial services lawyer. She won the Euroclear Prize for the most outstanding result in the CISI Diploma in Investment Compliance.
Drawing on her extensive private practice experience, Hannah leads training sessions on financial services topics such as anti-bribery and corruption, anti-money laundering, the financial promotion regime and market abuse, as well as corporate law matters including share purchase agreements, joint ventures and takeovers.
The PIMFA Learning Experience: