FCA eyes stringent social media rules in financial promotions crackdown

investmentweek.co.uk:

'We have seen a growing number of ads falling short of the guidance we have in place to stop consumer harm," said Lucy Castledine, director of consumer investments at the FCA.

The guidance will «modernise» the information companies use to promote financial products and services online, the regulator said, which will also reflect how social media is currently being used to advertise them.

The notorious rise of financial influencers, or ‘finfluencers', and the increase in often illegal promotions online, have been an area of scrutiny for the regulator, especially into how these practices can lead to consumer harm.

Part of the FCA's work has included working with the Advertising Standards Authority in creating infographics, roundtable discussions and live events to help educate and create awareness on the potential harm consumers can face due to illegal online promotions.

FCA clamps down on marketing of cryptoassets

Big tech companies have also faced greater regulation, with the introduction of advertising policies that have forced them to only allow financial promotions approved by FCA-authorised companies.

The new social media guidance will be subject to an eight-week consultation period, the FCA said, alongside its work on crypto advertisement rules, which are set to come into force from 8 October.

Lucy Castledine, director of consumer investments at the FCA, said: «We have seen a growing number of ads falling short of the guidance we have in place to stop consumer harm. 

»We want people to stay on the right side of our rules, so we are updating our guidance to clarify what we expect of firms when marketing financial products online.

«And for those touting products illegally, we will be taking action against you.»

F