The FCA confirms speculative mini-bond mass-marketing ban
What is happening?
The FCA has confirmed in its Policy Statement PS 20/15, issued in December 2020, its earlier proposals to permanently ban the mass-marketing of speculative illiquid securities, including speculative mini-bonds, to retail investors. The Policy Statement can be consulted here.
What do you need to do?
A temporary one-year ban was introduced without consultation in January 2020 following serious concerns that speculative mini-bonds were being promoted to retail investors who neither understood the risks involved nor could afford the potential financial losses.
The new rules, which make the ban permanent, will apply from 1 January 2021 and will include a small number of changes to the temporary ban following a consultation in June. This includes bringing listed bonds with similar features to other speculative illiquid securities, and which are not regularly traded, within the scope of the ban.
The ban applies to speculative illiquid securities other than where exemptions apply, as this is not a blanket ban. Exemptions apply to Special Purpose Vehicle structures that are comparable to investing directly in a single company carrying on commercial or industrial business, and also where the proceeds of an issue are used to buy assets which are used by the issuer or a member of its group for an existing general commercial or industrial purpose.
The FCA has stated that it will monitor compliance with the new rules and will take supervisory and/or enforcement action where necessary.
How can we help you?
If you’d like to know more about how we can help you with your illiquid securities marketing, or with any other aspect of FCA compliance, our expert team is here to help.
Contact us today on 0207 436 0630 or email info@thistleinitiatives.co.uk.