FIN.

CLLS responds on fin proms

The City of London Law Society has responded to FCA’s discussion paper on changes to the financial promotion rules for high risk investments and for firms approving financial promotions. It:

  • is concerned the regime for high risk investments has now become a complex patchwork which is hard for firms to understand;
  • says there is an increasing, and arguably anomalous, disconnect between COBS4 and the FPO;
  • says that really what is needed is a wider review less focussed on prescriptive rules which it says can result in a “whack a mole” approach – and this review should protect the breadth of necessary exemptions and not restrict retail customers unduly by using the vulnerable customer as the basis;
  • worries that increasing the regulatory burden on approvers and restricting definitions will lead to less choice for investors;
  • says work to mitigate scam investments should be prioritised to address the perimeter risk – which making the regime more onerous for authorised firms will not do;
  • calls for Online Safety legislation to make social media companies act;
  • notes that any proposals to change client categorisations should be accompanied by a comprehensive cost-benefit analysis

Emma Radmore