UK regulator to crack down on ads in high-risk investments

The Monetary Conduct Authority (FCA), the monetary regulator of the United Kingdom, has introduced a crackdown on the advertising and marketing of high-risk investments as part of the need to verify that buyers are not generally misled by excessively risky goods.

The FCA’s powerful stance was underscored in a press release on Monday, in which the regulator said it had finalized work on stricter guidelines for advertising and marketing and promotions in high-risk investments. .

The new guidelines do not apply to crypto – but

While the FCA’s new regulatory advice outlines an intervention against misleading currency promotions around high-risk investments, it does not apply to crypto.

This is what the company mentioned at launch, explaining that the use of these guidelines throughout crypto-asset promotions will only be considered”as soon as the authorities and Parliament have confirmed in laws how crypto advertising and marketing is likely to be brought into the remit of the FCA.”

When this happens, the regulator will announce qualification guidelines on the respective crypto-asset advertisements of the given asset type. However, it is generally expected that the guidelines related to crypto will not differ materially from those launched for high-risk investments.

FCA’s battle against misleading advertising

Under its new guidelines, the FCA wants all companies involved in approving and issuing sales supplies to have the appropriate experience. Likewise, any agency engaged in the advertising and marketing of high-risk investments is required to perform tighter controls, ensuring that targeted clients match intended investments.

The new guidelines also align with the Buyer’s investment technique, which aims to limit potential advertising to high-risk choices that don’t reflect a shopper’s menacing urge to feed. This is a goal the regulator wants to achieve and is calling for contractors to present clearer threat warnings, which must be distinguished in the announcement.

In particular, the use of incentives comparable to “referral bonuses”, which focus on buyer connections, have been prohibited.

We would like people to have the opportunity to make investments with confidence, to perceive the risks involved and to obtain the investments that may be right for them and that reflect their need for food against the threat.said Sarah Pritchard, FCA’s government director of markets.

According to the FCA, the powerful guidelines aim to address “poor money promotions” which are more likely to see buyers failing to understand the dangers of investing and the losses that certain finance products will include.

Martin E. Berry