FCA Has Imposed Stronger AD Restrictions

The Financial Conduct Authority (FCA) of the United Kingdom (UK) has implemented stronger regulations to prohibit deceptive advertisements for high-risk investment products. The promotion of crypto assets is exempt from this rule.

FCA UK government wants tougher crypto regulations

The UK government announced in January its plan to bring crypto marketing under the FCA’s remit. After getting confirmed in legislation, the FCA will reveal final rules on “qualifying crypto assets.” The press release said:

“Crypto remains high risk so people need to be prepared to lose all their money if they choose to invest in crypto assets.”

The high-risk investments will be impacted by the tougher regulations, and the firms who approve and issue marketing will need to have the necessary competence. Additionally, they will do inspections to make sure that the investments and the consumers are in line. The use of incentives such “refer a friend bonuses” will be prohibited, it should be highlighted. Companies need to provide risk warnings that are more precise and projective.

According to Sarah Pritchard, the FCA’s executive director of markets:

“Our new simplified risk warnings are designed to help consumers better understand the risks, albeit firms have a significant role to play too.”

“Where we see products being marketed that don’t contain the right risk warnings or are unclear, unfair or misleading, we will act,” she added.

A sizable proportion of people who don’t grasp the risk involved with high-risk schemes have received warnings from the FCA. 4,226 deceptive advertisements were taken down last year. Future investors will see more clear cautions in advertisements going forward.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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