The UK’s Financial Conduct Authority (FCA)  has  changed the rules concerning high-risk investment adverts addressed to retail investors.

The FCA has stated that a wider scope of legal protection is to protect the consumers who may be interested in investing in high-risk products with a potential for financial losses. The new regulation will require the entities offering high-risk investment products to address to consumers simple warnings on related high risk. The new legislation will prohibit such entities from incentivising risky investments through functions such as ’refer a friend’.

The regulation is in line with the FCA’s consumer protection objective. However, it does not apply to crypto-asset promotions. The legislation on the crypto-currency sector is still being discussed in the British Parliament and the issue of the FCA’s power to regulate crypto-assets is soon to be confirmed.

Last year, the UK’s financial regulator applied interventions to adverts promoting high-risk products among investors and changed 4 226 of them.

The FCA is planning to introduce to trading long‑term asset funds (LTAF) for a wider group of investors. The relevant consultations have already been announced. That could allow for the diversification of consumers’ portfolios, maintaining their protection.

Source: https://www.fca.org.uk/news/press-releases/fca-clamps-down-marketing-high-risk-investments-consumers