News Story: Financial promotion

On 6 September 2023, the Financial Services and Markets Act 2000 (Exemptions from Financial Promotion General Requirement) Regulations 2023 were laid before Parliament and published together with an Explanatory Memorandum. The regulations specify exemptions from the new framework for regulating the approval of financial promotions that will operate from 7 February 2024, which will require any authorised person who wishes to approve financial promotions of an unauthorised person to obtain prior permission from the FCA. The regulations come into force on 27 September 2023.

Background

S 20 Financial Services and Markets Act 2023 (FSMA 2023) amends s 21 FSMA 2000 to establish a new regulatory gateway which authorised firms will be required to pass through prior to being able to approve individual financial promotions issued by unauthorised firms. From 7 February 2024, the content of a financial promotion may only be approved by an authorised person if giving this approval is permitted under a new s 55NA FSMA 2000, or if it falls within an exemption. S 55NB(1) FSMA 2000 empowers HM Treasury to create exemptions from the requirement to pass through the gateway through secondary legislation.

Under the Financial Services and Markets Act 2000 (Commencement No. 2 and Transitional Provisions) Regulations 2023, the window for applications by authorised persons who wish to continue to approve financial promotions will be open from 6 November 2023 to 6 February 2024 (see FC Feature 25 August 2023). Authorised persons that have submitted an application to the FCA can continue to approve financial promotions during the application period and the regulatory gateway provisions will not be applicable until the application is either determined by the FCA or withdrawn.

Exemption regulations

The regulations exempt authorised persons from the requirement to obtain the FCA's permission through the gateway where an authorised person:

• approves their own financial promotions for communication by an unauthorised person (eg where an authorised person advertises in a newspaper);
• approves a financial promotion of an unauthorised entity within the same corporate group; and
• approves (as a principal) a financial promotion of an appointed representative, in relation to a regulated activity for which the authorised person has expressly accepted responsibility.

For more information on the new regulatory framework created by FSMA 2023, see FC Overview 5 September 2023.

First published on the Corporate News Service on 7 September 2023.

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