The UK’s financial regulator, the Financial Conduct Authority (FCA), finalized stronger rules today to help combat misleading adverts related to high-risk investment products, according to a press release.
The new rules, however, will not apply to the promotions of cryptoassets.
Instead, the FCA is awaiting the UK government to confirm in legislation how crypto marketing will be brought under the FCA’s remit, the press release said.
In January, the UK government announced plans to tighten rules around crypto advertising and bring crypto marketing within the FCA's remit.
Once this is confirmed in legislation, the FCA will publish final rules on the promotion of “qualifying cryptoassets.”
“These rules are likely to follow the same approach as those for other high-risk investments,” the press release said. “Crypto remains high risk so people need to be prepared to lose all their money if they choose to invest in cryptoassets.”
The stronger rules for high-risk investments require the firms that are approving and issuing marketing to have the appropriate expertise. In some cases, they will also need to conduct checks to ensure consumers and their investments are well matched.
Certain investment incentives, such as "refer a friend bonuses," will be banned and firms will need to use clearer and more prominent risk warnings.
“Our new simplified risk warnings are designed to help consumers better understand the risks, albeit firms have a significant role to play too,” Sarah Pritchard, executive director of markets at the FCA, said in the release.
“Where we see products being marketed that don’t contain the right risk warnings or are unclear, unfair or misleading, we will act,” she added.
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