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 the FCA's 'InvestSmart' campaign primarily aimed at addressing?
Answer: Warning consumers about the risks of high-risk investments and online investment fraud
The FCA's InvestSmart campaign is a consumer-facing initiative designed to help investors understand investment risks, spot scams, and avoid high-risk products that may not be suitable for them.
Under FCA rules, what must a promotion for a high-risk investment product include when targeted at retail consumers?
Answer: A specific prescribed risk warning and, for certain products, a 24-hour cooling-off period before investment
The FCA's high-risk investment rules require prescribed risk warnings in promotions and, for certain high-risk products, a 24-hour cooling-off period to reduce impulsive investment decisions by retail consumers.
What does the FCA expect from firms in relation to the ongoing monitoring of financial promotions?
Answer: Firms must review promotions to ensure they remain accurate and compliant throughout their lifecycle, withdrawing them if they become misleading
The FCA expects firms to have robust processes for ongoing monitoring of live promotions, ensuring they remain fair, clear, and not misleading, and promptly withdrawing or amending any that become inaccurate.
What is a 'tombstone advertisement' in the context of FCA financial promotions?
Answer: A basic factual announcement of a completed transaction, containing limited information and not constituting a full financial promotion
A tombstone advertisement announces a completed deal (e.g., a bond issuance or IPO) with minimal factual detail, and certain exemptions exist recognizing that these basic announcements are not full promotional communications.
Under FCA COBS rules, what is required when a firm communicates information about the costs and charges of an investment product?
Answer: Costs and charges must be disclosed in a clear, aggregated format so consumers can understand the total impact on returns
COBS 6.1ZA and related rules require firms to provide clear, aggregated cost and charges disclosure — showing both percentage and monetary amounts — so consumers can understand the total effect of costs on their investment.
What action can the FCA take if it identifies a non-compliant financial promotion published by an authorized firm?
Answer: The FCA can require immediate withdrawal or amendment of the promotion, issue a public warning, and take enforcement action against the firm
The FCA has broad powers to require the immediate withdrawal or amendment of non-compliant promotions, issue public consumer warnings, and take formal enforcement action including fines and public censure against the responsible firm.