The FCA finalised social media guidance in relation to financial promotions published on 26 March 2024 acknowledges that social media has become a central part of firms’ marketing strategies allowing them to reach a large audience with greater speed and efficiency. However, the FCA is concerned that poor quality financial promotions on social media can lead to significant consumer harm due to the complex nature of financial products and services and the potential wide reach of financial promotions relating to such products and services. In light of the changing nature of social media and the introduction of significant regulatory changes such as the Consumer Duty, the FCA is publishing its guidance to clarify the application of the FCA’s existing rules and policies and provide guidance on the financial promotion perimeter. Firms remain responsible for the compliance of every promotion they make or cause to be made and they also need to ensure that influencers they work with comply with the financial promotion rules and guidance when they are communicating with their followers.
The FCA’s finalised guidance (FG24/1) details how financial promotions should be communicated on social media. It also summarises responses to the July 2023 guidance consultation as set out in our previous Engage article.
FG24/1 seeks to clarify the application of the FCA’s existing rules and policies and provide guidance on the financial promotion perimeter. The guidance is relevant to:
FG24/1 reiterates the following key takeaways for firms:
The guidance raises some important questions on social media financial promotions.
The FCA is replacing its previous 2015 social media guidance with FG24/1 in light of the changing nature of social media and the introduction of significant regulatory changes such as the Consumer Duty since the last guidance was published in March 2015. Whilst the Guidance does not create new obligations for those who promote financial products and services on social media, it does help to clarify how firms might approach complying with existing regulatory obligations. The Guidance also helps to clarify for non-authorised persons when communications fall within the FCA’s regulatory perimeter and how the FCA’s rules might apply to their activities.
If you would like to discuss the finalised Guidance set out in FG24/1 with our financial promotion regime specialists, please get in touch with the Hogan Lovells contacts listed in this article.
Authored by Melanie Johnson.
UK: “Finfluencers”, TikTok and the Consumer Duty
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