A financial promotion is any advertisement, communication, or other material that promotes a financial product or service. Financial promotions can take many forms, including print and online advertisements, marketing emails, social media posts, and sales presentations.

The Financial Conduct Authority (FCA) is the financial regulatory body in the United Kingdom that is responsible for regulating the conduct of financial firms. The FCA has published rules and guidance on financial promotions, which outline the requirements that firms must follow when creating and distributing these materials.

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There are a number of requirements that you will need to follow to ensure you meet financial promotions, these include:

• Ensuring that the financial promotion is clear, fair, and not misleading: Financial promotions must be presented in a way that is clear, fair, and not misleading to consumers. This means that they should not omit important information or use language or imagery that could be confusing or misleading
• Providing accurate and balanced information: Financial promotions must provide accurate and balanced information about the financial product or service being offered. This includes information about the potential risks and benefits, as well as any fees or charges that apply
• Identifying the firm and the product or service: Financial promotions must clearly identify the firm that is offering the product or service, as well as the specific product or service being promoted. This helps consumers to understand who they are dealing with and what they are being offered

Approving financial promotions

To approve a financial promotion, you should empower your team to review the promotion to ensure that it complies with the above requirements.

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To approve a financial promotion, the following steps should be followed:

1. Review the promotion against the relevant laws, regulations, and policies: The first step in approving a financial promotion is to review it against the relevant laws, regulations, and policies that apply. This includes checking that the promotion is fair, clear, and not misleading and that it meets the FCA's requirements for content, format, and targeting.
2. Ensure that the promotion complies with the FCA's principles for business: The FCA has published principles for business that outline the general standards and expectations that firms must meet when conducting their business. When approving a financial promotion, it's important to ensure that it complies with these principles, which include treating customers fairly and acting with integrity.
3. Check that the promotion is suitable for the target audience: Financial promotions must be appropriate for the target audience, taking into account factors such as the audience's knowledge and experience, and their understanding of the risks and features of the product or service being promoted. When approving a financial promotion, you should ensure that it is suitable for the intended audience.
4. Obtain the necessary approvals: Some financial promotions may require additional approvals, such as those that involve complex or high-risk products. In these cases, it's important to obtain the necessary approvals before the promotion is released.
5. Monitor and review the promotion: After approving a financial promotion, it's important to monitor and review it to ensure that it continues to comply with the relevant laws, regulations, and policies. This may involve tracking customer feedback and complaints, as well as conducting regular reviews of the promotion's content and effectiveness.

Overall, the process of approving financial promotions is an important part of ensuring that consumers are provided with clear and accurate information about financial products and services. By reviewing and approving financial promotions, authorized persons can help to protect consumers and promote fair and responsible practices in the financial sector.Internal Controls on your financial promotions

When approving financial promotions, it's important to have adequate internal controls in place to ensure that the promotions are compliant with relevant laws, regulations, and policies. Some of the key types of internal controls that you may need to implement in this context include:

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1. Policies and procedures: Having clear and comprehensive policies and procedures in place can help to ensure that financial promotions are created and approved in a consistent and compliant manner. These policies and procedures should cover all aspects of the financial promotions process, from the initial concept and development to the review and approval, to the monitoring and review of the promotion after it has been released.
2. Training and education: Staff who are involved in creating and approving financial promotions should be properly trained and educated on the relevant laws, regulations, and policies. This can help to ensure that they have the knowledge and skills needed to create and approve promotions that are fair, clear, and not misleading, and that meet the FCA's requirements.
3. Review and approval processes: It's important to have robust review and approval processes in place for financial promotions. This should involve multiple levels of review, with different staff members or departments reviewing the promotion at different stages of the process. This can help to ensure that the promotion is thoroughly checked for compliance and that any issues or concerns are identified and addressed before the promotion is released.
4. Monitoring and reporting: After a financial promotion has been approved and released, it's important to monitor and report on its effectiveness and compliance. This may involve tracking customer feedback and complaints, as well as conducting regular reviews of the promotion's content and performance. This can help to identify any issues or concerns and take appropriate action to address them.

About MEMA

Our specialist team has the experience and expertise to help you. Our offering includes a regulatory business plan, a suite of compliance policies and procedures, and an IT security risk assessment. We can provide template documents and work with you to tailor these to your specific circumstances. We can also carry out a gap analysis on your current policies and procedures – and help you address any action points identified.

We will explain to you the FCA’s expectations and its recent publications and prepare a gap analysis and/ or a suitable remediation plan. Among the firms, we work with are:

• Payment initiation service providers (PISPs)
• Account information service providers (AISPs)
• E-Money institutions
• FX exchange companies
• Merchant acquirers
• Bill payment service providers
• Electronic communication exclusion businesses

If you need any help or would like a complimentary chat to understand what your business may require contact MEMA at contact@memaconsultants.com.