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  • Thu. Aug 18th, 2022

FCA’s new rules on marketing of high-risk investments don’t currently apply to crypto

ByNdasi Tata

Aug 2, 2022
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1659382916026 f6691f3a 5ca9 4440 bc0a 4942c2f1d76b

The Financial Conduct Authority (FCA), UK’s financial regulator, has announced a clampdown on the marketing of high-risk investments amid the need to make sure investors are not hoodwinked into high risk products.

The FCA’s tough stance was highlighted in a press release on Monday, in which the regulator said it had finalised its work on stronger rules on marketing and promotions in high-risk investments.

New rules don’t apply to crypto – yet

While FCA’s new regulatory guidelines provide an intervention against misleading financial promotions around high-risk investments, they do not apply to crypto.

That’s what the agency said in its release, explaining that applying these rules across cryptoasset promotions will only be considered “once the Government and Parliament confirms in legislation how crypto marketing will be brought into the FCA’s remit.”

When this happens, the regulator will announce qualifying rules on cryptoasset ads respective of the given type of asset. Generally, however, it is expected the crypto-related rules will not differ markedly from those being introduced for high-risk investments. 

FCA’s fight against misleading adverts

Under its new rules, the FCA wants all companies involved in the approval and issuance of marketing materials to have the appropriate expertise. As well, any firm engaged in the marketing of high-risk investments is obligated to conduct better checks, ensuring that targeted consumers match the intended investments.

The new rules also align with the Consumer Investments Strategy, which is intended to limit potential exposure to high-risk offerings that don’t reflect a consumer’s risk appetite. It’s an objective the regulator wants to achieve and demands that marketers provide clearer risk warnings, and which must be prominent within advert.

Notably, the use of incentives such as ‘refer a friend bonuses’, targeting investors’ connections have been banned. 

We want people to be able to invest with confidence, understand the risks involved, and get the investments that are right for them which reflect their appetite for risk,” said Sarah Pritchard, FCA’s Executive Director, Markets. 

According to the FCA, the tough rules intend to tackle “poor financial promotions” that are likely to see investors fail to appreciate the risks of investing and losses that may come with certain investment products.

The post FCA’s new rules on marketing of high-risk investments don’t currently apply to crypto appeared first on CoinJournal.

Ndasi Tata

Ndasi Tata is a Cameroonian-born Bitcoin entrepreneur and former state journalist who's also known for being a Bitcoin and Blockchain advocate. He's a crypto lover and reporter and has promoted several crypto projects within the African Continent. He uses a variety of social media and online channels. In addition to running a successful Facebook page with thousands of fans, he also promotes blockchain and bitcoin development initiatives on the well-liked YouTube channel #cryptoafrica-now. He earned an M.Sc. from the University of Nicosia in Cyprus in Blockchain and Digital Currency. At the University of Nicosia, Andreas Antonopoulos, Ph.D., and Antonis Polemitis, Ph.D., serve as role models.

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