Brand new high-risk investment promotional guidelines are being introduced by the UK’s FCA. All firms under the new rules will need to disclose all related risks to their users, especially risks associated with the trading of specific financial assets.
The executive director of the FCA, Sarah Pritchard, commented that the goal of this is to protect the user and provide him/her with advice pertaining to all risks involved. Pritchard furthers that these risk warnings have been simplified for maximum efficiency, and that the FCA will act with vigilance on every misleading or unfair ad. She concludes that such measures are dire in a time where living costs are skyrocketing, prompting users to invest in riskier schemes and financial instruments.
The FCA will be banning refer-a-friend programs and other similar incentives. Risk warning pop ups will be introduces for all clients, meaning that companies will have to stay on top of the most recent approved promotional material by the FCA.
The FCA will receive feedback on the new guidelines by 1oth October 2022, and by the beginning of next year the rules will be put into action.
Meanwhile, cryptocurrencies, although considered a high-risk assets, will not undergo promotional changes for now. Currently the FCA is awaiting the government to decide how to regulate cryptocurrencies.