Last week, the FCA released a consultation paper CP22/27 with its proposed measures to further tighten controls and reduce risk of consumer harm from misleading advertisements.
But lets look a little bit below the surface of this and the likely impact.
Firstly the FCA proposed that firms offering Section 21 sign-off for unauthorised firms will be required to vary permissions to continue to conduct this activity. The FCA has proposed a hefty £5,000 application fee for this type of application which is under consultation within the annual fees and levies consultation paper issued last week. The size of the fee is aligned with the direct cost the FCA believes it will take to assess an application. The FCA intimated it will be rare that firms applying for s21 sign-off will be able to have wide-ranging permissions across sectors, therefore firms applying to the gateway should think carefully about the scope of the promotions they are aiming to approve.
What is clear is that firms approving promotions for their own use or that of their ARs will not need to apply for this specific permission which is good news for the vast majority of firms out there; however it would stand to reason that those approaching the authorisation gateway to either be newly authorised or for adding new permissions will certainly have additional scrutiny placed on their competence and experience in this risk area. It is likely the FCA will require firms to demonstrate that they have the right people in the business to approve such material and that in line with new Consumer Duty are able to demonstrate will result in good outcomes.
