How are financial promotions regulated?

Apr 12th '16

If you work in financial services marketing, you’ll be only too familiar with the need to ensure your financial promotions comply with FCA requirements.

Whatever area of financial services you work in, you need to make sure your marketing and communications meet the regulator’s standards in terms of being ‘fair, clear and not misleading’. They also need to have been produced in a way that’s compliant with the FCA’s standards in terms of review, approval and archiving.


But, with a wealth of regulation, and with guidance being updated and added to all the time, it can be hard to keep track of exactly how financial promotions are regulated by the FCA. So here we’ve compiled a summary – all the things you need to know about financial promotions requirements to make sure you always stay on the right side of the regulator.


They have to meet the requirements set out in the FCA Handbook

The regulator’s Handbook contains detailed guidance outlining both how firms should conduct themselves and, specifically, how they should approach financial promotions. These are set out in its Principles for Business and its ‘Code of Business Sourcebooks’ covering different areas of the financial services industry and practice.


They have to be ‘fair, clear and not misleading’

This is one of the regulator’s key objectives. All regulated firms need to make sure their communications meet this requirement, or they will fall foul of the FCA. This means not making any claims that cannot be substantiated, or implying that past performance may be an indicator of future returns.


They need to display the relevant risk warnings and disclaimers

You need to make sure the correct disclaimers and disclosures are used. Firms often have a wide range of risk warnings or disclaimers specific to particular markets, business units or countries. You can read more about how to make sure yours are always correct in this blog on ‘The disclaimer lottery – which one are you using?’.


They need to meet the regulator’s approval and sign-off criteria

When it comes to financial promotions, it’s not just the end result that matters. They need to have gone through the correct approvals process – and this needs to have been documented, with an audit trail of version history and sign-off. Final versions of all financial promotions need to be archived – even social media posts, which many firms fail to realise.


Social media is not a real time promotion

In the same vein, social media needs to be treated like any other financial promotion when it comes to regulatory compliance. This means that posts on your Twitter, Facebook or Linkedin feeds need to follow the same compliance approval processes as brochures, web pages or other collateral. They also need to be stored in the same way as other promotions: relying on Twitter or any other social media platform to keep a log of your posts isn’t enough.


You need to have a clear policy for financial promotions production and approval

A clear and documented policy on financial promotion production is essential. This should be approved by your firm’s governing body, and should be followed every time a promotion is produced. It should outline clear responsibilities for the creation, ownership and approval of promotions.


Your review and withdrawal policies for promotions must be compliant

Compliance requirements do not end once a promotion is issued. You need to make sure you proactively manage its duration and withdrawal. Some promotions may be time-sensitive, only relevant for a certain period. Others may need to be withdrawn if information in them becomes out of date. A procedure for managing this should be included in your financial promotions policy.


We have significant experience in reviewing marketing material, social media, copywriting and design to help ensure compliance. To find out more visit Advertising Reviews pages or Contact us.


About us

LS Consultancy offer a complete solution with a range of self-service, cost effective, Regulatory Compliance and Marketing products and solutions including Financial Promotion copy advice that are uniquely suited to supporting firms.


We provide a cost-effective and timely bespoke copy advice and copy development services to make sure all your advertising and campaigns are compliant, clear and suitable for their purpose.


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