The FCA recently published a consultation on how its financial promotion requirements apply on social media.
The purpose of this consultation is to both update and eventually replace the existing guidance (FG15/4), which was initially published back in 2015.
Whilst the regulator fully recognises the use of social media has helped firms communicate with consumers more effectively, likewise poor quality financial promotions on social media can lead to significant consumer harm due to their wide reach and the complex nature of financial services.
The guidance consultation therefore aims to ensure that all firms understand how the financial promotion rules apply on social media. The FCA also wants firms to consider the guidance alongside their obligations under the Consumer Duty in order to deliver good outcomes for retail customers.
Additionally, the guidance seeks to address harm on social media from business models such as buy-now-pay-later and cryptoassets, as well as the harm that can occur arising from influencers promoting both non compliant or illegal promotions.
The consultation closes on the 11th September 2023.