On 17 July 2023, the UK Financial Conduct Authority (the FCA) published a press release and draft guidance dealing with financial promotions on social media. This has been a hot topic for a number of years. The consultation period ends on 11 September 2023. Responses can be sent by email to gc23-2@fca.org.uk.
The key messages from the draft guidance are that:
– The FCA proposes to keep the key principles of Finalised Guidance 15/4, including its expectation that financial promotions should be standalone compliant.
– The consumer duty (which comes into force on 31 July 2023) will “raise our expectations of firms communicating financial promotions on social medium above the requirement of Principle 7 to be ‘clear, fair and not misleading’.“
– The FCA will continue to focus on compliance issues on social media (and, in particular, says firms should consider whether financial promotions for debt counselling would be appropriate given the complexity of such services).
– For unregulated buy-now, pay-later products, the promotion must outline the relevant risks and be balanced (and there’s a proposed example, in Figure 6, of a clear, fair and not misleading promotion).
– The FCA sets out its expectations on prominence standards for social media channels.
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