FCA Cracking Down on Advertising of High-Risk Assets, Not Cryptocurrencies
The British Financial Supervision Authority (FCA) will tighten the rules for promoting high-risk products for individual investors.
The financial regulator requires clearer and more visible warnings about risks from companies engaged in marketing high-risk investments. Some investment incentives, such as a bonus for attracting a friend, will be completely banned.
In a note published on August 1, the FCA finally approved stricter rules designed to "help combat misleading advertising encouraging investment in high-risk products." The regulator's attempt to reduce the number of people investing in high-risk products is caused by concerns that "a significant number of people" do not understand the risks associated with this or that type of investment.
However, the promotion of crypto assets is not subject to the new rules. The FCA intends to develop final rules for the promotion of cryptocurrencies only after the government confirms that such assets are within the competence of the regulator.
However, since the release also qualifies the cryptocurrency as a high-risk asset, future rules are likely to be consistent with those specified in the announcement.
"Cryptocurrencies remain high-risk assets, so people should be prepared to lose all their money if they decide to invest in crypto assets," the FCA states.
Since the announcement last year, the FCA has intervened in significantly more financial advertising campaigns to prevent harm than before. For the year ended July 2022, 4,226 advertisements were changed or withdrawn.
The FCA is asking for feedback on the new rules by October 10, 2022 and promises to confirm its final draft early next year.
On July 20, a bill on financial services and markets was introduced to the Parliament of the United Kingdom. It will regulate stablecoins and expand the Banking Act of 2009 and the Financial Services (Banking Reform) Act of 2013 to cover "digital settlement assets" (DSA), authorizing Treasury to regulate DSA.
https://coin-signal.com/cryptonews/fca-cracking-down-on-advertising-of-high-risk-assets-not-cryptocurrencies/
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