Streamlining: financial promotions under NEWCOB

November saw the first serious delivery of the FSA’s new principles-based approach to regulation in the form of 850 pages of consultation and proposed new conduct of business and complaint rules. One of the most awaited was the proposed new rules on financial promotions. In previous issues, Adam Samuel has railed against the difficulties firms face in complying with the existing provisions, the way that pointless rules distract attention from the core principles and erratic enforcement. So, we asked him to give his views on the proposed new material.

Adam Samuel Dip PFS, LLM, barrister and compliance consultant can be contacted on tel 020 7435 2620; email AdamSamuel@aol.com, website www.adamsamuel.co.uk His book,”Complaints and Compensation: a Guide to the Financial Services Market”, is available from www.cityandfinancial.com and www.adamsamuel.com.

The proposed financial promotions rules provide a reasonable benchmark by which to judge the FSA’s attempts to develop principles-based regulation. The existing material in COB 3 and the sister ICOB and MCOB 3s contains a large volume of rules and guidance which state the obvious, the irrelevant and ideals with which compliance is almost impossible. The regulator needed to take a serious hack at some of the undergrowth which has always threatened to obscure the key ideas at the heart of financial promotions regulation. These are the notion that advertising must be balanced and accurate and that firms must go through procedures designed to achieve this.