Earlier this year, the FCA announced a series of significant regulatory changes that will materially impact financial promotions to retail investors and the process for firms that approve financial promotions.
Financial institutions that offer, or are working towards offering, their clients access to private markets will need to be fully aware of their regulatory obligations in light of these changes.
The first of these changes come into effect from 1st December 2022, with the remainder needing to be actioned by 1st February 2023.
The policy statement (PS22/10) sets out changes to the FCA financial policy rules which fall into three main categories:
Our briefing note outlines the new regulations and offers practical advice on what this will mean in practice for firms.
Access briefing noteTo comply with the new FCA financial promotion rules, these are the actions firms will need to consider:
Ensure a general risk warning accompanies any promotion of high-risk investments
Ensure a further, personalised risk warning is displayed to investors
Implement a mandatory 24-hour “cooling off period"
Ensure more robust categorisation of investors
Test an investors’ appropriateness before they can invest in an RMMI or NMMI
Remove references to any inducements or incentives
Undertake preliminary suitability assessments for NMMI promotions
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