Social media guidance set for revamp

The Financial Conduct Authority (FCA) has released a press statement to inform of the launch of a consultation as regards a proposed new guidance on financial services and product promotions via social media. The new guidance would replace the old one (FG15/4) that was issued in 2015 and has not been updated since. FG15/4 contains principles for financial promotions on social media, mainly focusing on character-limited platforms like Twitter. Since then, social media has grown significantly as a marketing tool for firms, with influencers, YouTubers, streamers, and new platforms like Threads and Discord being used for financial promotions. In response to these changes, the FCA is now seeking feedback and considering the development of new, separate guidance for financial promotions on social media to adapt to the current landscape.
Among others, the new guidance would contain the following:
– the basic principles set out in FG15/4 including
– the communication must be clear, fair and not misleading;
– the promotion must be within the scope of the regulated, authorized activity;
– the promotion must contain a risk warning; and
– the promotion must be signed off (approved by a competent person).
– clarifications as to how prominently risk warnings and other information must be displayed.
– the incorporation of the „positive outcome“ principle under the upcoming Consumer Duty.
– updated graphical examples to enhance understanding of which promotions the FCA deems (in)appropriate and (non-)compliant with FCA rules.
– an entirely new section concerning financial promotions made by influencers, including a checklist for responsible financial promotions and examples of promotions that would subject the influencer to the financial promotion rules.
– clarifications as to the FCA’s expectations of firms that use influencers or affiliates to promote their products or services.