Financial promotions face new approval 'gateway'

The Government proposes strengthening oversight of financial promotions issued by unauthorised firms, by establishing a regulatory 'gateway' as well as bringing the promotion of certain cryptoassets under FCA remit. Charlotte Hill and Arnav Gupta review the consultation papers.

Charlotte Hill is a partner and head of the financial services regulatory group at Taylor Wessing in London, where Arnav Gupta is an associate. Contact them on c.hill@taylorwessing.com and a.gupta@taylorwessing.com.

On 20 July 2020, HM Treasury published two consultation papers with significant proposed changes to the regulatory framework for financial promotions. The consultations are: (1) 'Regulatory Framework for Approval of Financial Promotions' [1] and (2) 'Cryptoasset promotions' [2]. The consultations propose increasing the oversight of financial promotions issued by unauthorised firms by establishing a regulatory 'gateway' and bringing the promotion of certain types of cryptoassets under Financial Conduct Authority regulation, respectively. The proposals are intended to enhance consumer protection as Mr John Glen, Economic Secretary to the Treasury and City Minister, recently noted: "it's important that people can understand the financial products they see promoted. If adverts by unauthorised firms are misleading, or don't fully outline the risks, then people can end up losing money." [3]