FCA Financial Promotions and Communications Flashcards
6 cards from real FCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 FCA Financial Promotions and Communications flashcards as text
What is 'greenwashing' in the context of FCA financial promotions rules?
Answer: Making misleading claims about the environmental or sustainability credentials of financial products
Greenwashing occurs when firms make unsubstantiated or misleading ESG or sustainability claims in financial promotions, which violates the FCA's 'fair, clear, and not misleading' standard and its specific sustainability disclosure rules.
What was the primary purpose of the FCA's 2023 intervention on 'Refer a Friend' bonuses offered by investment platforms?
Answer: To ensure referral incentives were not used to induce consumers to take on inappropriate levels of investment risk
The FCA scrutinized referral bonuses to ensure they did not incentivize consumers to invest more than was suitable for them, consistent with consumer protection and fair promotion rules.
Under the FCA's financial promotion rules, what does the 'approval' of a financial promotion by an authorized firm involve?
Answer: The authorized firm confirms the promotion complies with FCA rules and takes regulatory responsibility for its content
When an authorized firm approves a financial promotion for an unauthorized person, it takes on regulatory responsibility for ensuring the content meets all applicable FCA rules, including being fair, clear, and not misleading.
What new requirement did the FCA introduce in 2023 for firms approving financial promotions for unauthorized persons?
Answer: Firms must apply to the FCA for specific permission to approve promotions for unauthorized persons
From February 2023, firms wishing to approve financial promotions for unauthorized third parties must hold specific FCA permission to do so, strengthening oversight of the financial promotion approval market.
How does the FCA treat social media posts by authorized firms under its financial promotion rules?
Answer: Social media posts that are financial promotions must comply with the same fair, clear, and not misleading standards as any other promotion
The FCA applies its financial promotion rules to social media content, meaning any post that is a financial promotion must meet the same standards as any other regulated communication, regardless of the platform used.
What does the FCA's Consumer Duty require with respect to the design of financial promotions?
Answer: Promotions must be designed to support good consumer understanding and help consumers make informed decisions
Under the Consumer Duty's consumer understanding outcome, firms must design communications and promotions that equip consumers with the information they need to make effective, timely, and properly informed decisions.