Breaking: Financial Regulator Tightening Social Media Promotions And “Finfluencers” Rules
Crypto Market News: The UK financial market watchdog Financial Conduct Authority (FCA) on Monday said it will revise social media guidance to curb illegal and non-compliant financial promotions. The FCA will also prevent financial influencers from promoting products and services that harm customers. The FCA is again targeting the crypto market and influencers promoting crypto assets on social media platforms.
UK FCA To Revamp Social Media Rules
The Financial Conduct Authority (FCA) in a press release on July 17 said it is consulting on new social media guidance for promoting financial products and services on platforms to combat illegal and non-compliant financial promotions. The new social media guidance will be consulted over the next 8 weeks.
Lucy Castledine, Director, Consumer Investments at the FCA, said:
“We want people to stay on the right side of our rules, so we’re updating our guidance to clarify what we expect of firms when marketing financial products online. And for those touting products illegally, we will be taking action against you.”
The FCA is working with the Advertising Standards Authority to increase scrutiny over illegal financial promotions and advertising by “finfluencers” and companies. The regulators are also working to educate consumers and influencers about the risks in promoting financial products.
From October 8, the FCA will ban incentives to invest in crypto, such as “refer a friend” bonuses. Also, firms must introduce clear risk warnings and a 24-hour cooling period providing first-time investors enough time to consider their investment decision.
Emphasis on Crypto Promotions
The FCA seeks to crackdown on marketing strategies for new business models such as buy-now-pay-later and crypto assets focused on social media. Registered crypto exchanges and firms must comply with the social media promotions rules released in an earlier press release.
The regulators will also limit the use of memes to promote crypto assets as these are subject to the FCA rules. The firms are recommended to mention the risk warnings and restrictions in investing in crypto assets.
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