On 29 April 2021, the Financial Conduct Authority (“FCA”) published a Discussion Paper DP21/1 concerning the proposed strengthening of the financial promotion rules for high-risk investments and firms approving financial promotions (the “Discussion Paper”). The Discussion Paper relates to: the FCA’s classification of high-risk investments; further segmentation of the high-risk ...
The FCA yesterday published its final rules on the marketing of speculative mini-bonds to retail investors, which will apply from 1 January 2021. This follows the FCA’s introduction of temporary rules banning the marketing of these instruments to retail investors on 1 January 2020, and a subsequent consultation relating to ...
In this article, the second in the series, we continue to look at recent regulatory developments impacting the FinTech industry. Our first article looked at the UK Financial Conduct Authority’s (FCA) ban on the marketing and distribution of crypto-derivatives to retail investors and its latest sandbox schemes. Here, we discuss ...
On 18 June 2020, the FCA released a new consultation paper CP20/8 on High-risk investments: Marketing speculative illiquid securities (including speculative mini-bonds) to retail investors (the “Consultation Paper”). In summary, the Consultation Paper proposes to: Extend the current ban on the marketing of speculative illiquid securities (“SISs”) (including speculative mini-bonds); ...
Today the FCA introduced temporary rules banning the marketing of speculative mini-bonds to retail investors. The rules will apply from 1 January 2020 for a period of 12 months, expiring on 31 December 2020.
Anti-money laundering, terrorist financing, and know your client obligations
FCA-authorised firms are required, pursuant to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on Payer) Regulations 2017 (“MLRs”), to implement anti-money laundering (“AML”) measures.
Systems and control
FCA-authorised firms must have appropriate systems and controls in place taking into account the nature, scale, and complexity of the business. This creates numerous obligations, primarily relating to:
Suitability assessment obligations
An online advice platform will need to consider whether an investment is suitable for a client when providing investment advice.
Under the Financial Services and Markets Act 2000 (“FSMA”) a person cannot carry on any “regulated activities” unless they are authorised by the FCA, or unless it falls within an exemption or exclusion. Any contravention of this prohibition is a criminal offence.
The proliferation of online platforms in financial services has created a new mechanism for distributing financial services. This article sets out the legal and regulatory challenges faced by an online financial services platform.