The FCA has proposed new measures to clamp down on unfair or misleading financial marketing.
The proposals, outlined in a consultation paper published on Tuesday (Dec. 6), target crypto asset service providers and buy now, pay later (BNPL) loan providers.
Although the U.K.’s Financial Conduct Authority (FCA) itself does not write the law but only enforces it, the document points to ongoing efforts by lawmakers to bring both sectors within its regulatory remit.
In January, the government announced its intention to regulate crypto asset marketing.
Rishi Sunak, chancellor at the time, said, “crypto assets can provide exciting new opportunities, offering people new ways to transact and invest — but it’s important that consumers are not being sold products with misleading claims.”
On the BNPL front, following a government review of the sector, in June the Treasury recommended regulating BNPL lenders in much the same way as other lenders. The recommendations included granting the FCA powers to oversee the space and imposing rules to prevent predatory practices such as the use of misleading advertisements.
For both BNPL and crypto advertisements, the U.K. government has chosen the Financial Services and Markets Bill (FSMB) as the legislative instrument that will carry the new rules into law.
Recently tabled amendments to the bill, which will be discussed in Parliament on Wednesday (Dec. 7) will grant the FCA power to oversee both crypto asset service providers and BNPL lenders. Under the new framework, both groups of companies will be held to the same advertising rules and standards as all FCA-regulated entities.
While non-regulated companies can currently advertise financial products in the U.K., they can only do so with the backing of an FCA-approved partner.
The FSMB will also introduce a new regulatory gateway for firms approving financial promotions, which will require financial institutions to apply for special permission to approve them. It will also give the FCA power to review and block those promotions.
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