Regulatory News: Policy Statement PS23/13

Introducing a gateway for firms who approve financial promotions

The FCA has recently published details of the new application gateway for firms that wish to apply to approve financial promotions for unauthorised persons including cryptoasset firms.

Under the new requirements, firms that are currently approving financial promotions under Section 21 of FSMA and that may want to continue doing so, must submit a variation of Permission (VoP) application for approver permission (S.21 Approver) during the 3-month window that will open on 6 November 2023. There are, though, certain exemptions where an authorised person will not require permission to approve a financial promotion.

Firms that do not submit a VoP application during this window, will need to stop approving financial promotions for unauthorised persons on 7 February 2024. After that, firms can still apply for permission in the usual way, but they will not be able to approve financial promotions until the FCA have approved their application.

Firms that submit an application during the window provided will be able to continue approving all financial promotions until their application has been determined.

From 7 February 2024 the FCA will update its Financial Services Register to show firms’ ability to approve financial promotions for unauthorised persons.

Generally, firms applying for S.21 approver permission will need to provide the following information:

1. Fully explain the types of promotion the firm intends to approve: The firm must include how many promotions the firm expects to approve and the revenue it expects to generate from approving promotions. Where applicable, the firm should specify the marketing restrictions that apply to any of the investment types for which it intends to approve promotions.

2. Expertise to approve promotions: Firms must explain in detail what expertise the firm has to approve the type of promotions for which it is applying for approver permission. The FCA will consider what professional qualifications or work experience any relevant individuals have

3. Policies, systems and controls: The firm must have appropriate policies to ensure the promotions it intends to approve are clear, fair and not misleading, and otherwise comply with applicable financial promotion rules, as well as to withdraw approval from unauthorised persons where required. The firm should also be able to demonstrate how it will monitor the financial promotions it approves on an ongoing basis.

4. Historic approvals: Provide details of any approvals the firm has given over the past 12 months. The FCA will use this to assess whether the historic approvals have potentially caused harm, which could result in the refusal of the application.

The statutory deadline under FSMA for determining applications is 6 months for a complete application and 12 months for an incomplete application. So brace yourselves!

Further details regarding the FCA's position and approach to assessing applications at the gateway are included in its recent published Policy Statement 23/13 (PS23/13)

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