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FCA clamps down on marketing of high-risk investments to consumers

August 3, 2022

What has happened?

In August 2022, the FCA finalised, in its Policy Statement 22/10, stronger rules to help tackle misleading financial promotions that may encourage consumer investing in high-risk products.

Under these rules, firms approving and issuing marketing promotions must have appropriate expertise, and firms marketing some types of high-risk investments will need to conduct better checks to ensure consumers and their investments are well matched.

What are the key points of the Policy Statement?

In January 2022, the FCA had consulted in its Consultation Paper CP 22/2 on strengthening the financial promotion rules for high risk investments, including cryptoassets. This Policy Statement summarises the feedback received to CP22/2. It sets out the final policy position and Handbook rules, which are designed to strengthen the regime for how high-risk investments can be promoted. At this stage, the final rules apply to those investments already subject to marketing restrictions.

The PS also contains the final strengthened rules for firms when communicating or approving financial promotions. These rules are, for the FCA, a key part of delivering its Consumer Investments Strategy.

In CP22/2, the FCA proposed changes in the following three areas:

  • The classification of high‑risk investments The FCA proposed to rationalise its COBS 4 promotional rules under the terms ‘Restricted Mass Market Investments’ and ‘Non‑Mass Market Investments.’, as defined below.


  • The consumer journey into high risk investments. The FCA proposed a package of measures to strengthen the consumer journey by making changes to the following areas; strengthening risk warnings, banning inducements to invest , such as “refer a friend” or new joiner bonuses, introducing positive frictions such as a cooling-off period, improving client categorisation and stronger appropriateness tests.
  • The role of firms approving (s21 approvers) and communicating financial promotions. The FCA wants to strengthen the role of s21 approvers, as they play an important role in enabling unauthorised issuers of high risk investments to reach consumers and to develop a robust regime to complement the proposed s21 gateway which, when implemented, will ensure s21 approvers meet high standards. This is intended to ensure approving firms have the relevant expertise in the promotions they approve and that the overall quality of financial promotions in the market is high. There will be two key new rules that will;

o require firms to self assess whether they have the necessary competence and expertise (C&E) in an investment product or service before approving or communicating a relevant financial promotion, and

o require approver firms to obtain attestations every three months of ‘no material change’ from promotion issuing clients that have approved promotions, for the lifetime of the approved promotion.

The rules related to risk warnings for financial promotions of high risk investments will have effect from 1 December 2022. All other rules will have effect from 1 February 2023.

Cryptoasset promotions currently sit outside the FCA’s remit. In January 2022, the Treasury confirmed its intention to legislate to bring certain cryptoassets into the scope of the financial promotion regime. CP22/2 set out the proposed rules for cryptoasset promotions and the FCA will make its final rules for cryptoasset promotions once the relevant legislation has been made by the Treasury.

How can we help you?

If you’d like to know more about how we can help you with your financial promotion or cryptoasset arrangements, or any other regulatory compliance issues, our specialist team is here to help

Contact us today on 0207 436 0630 – or email