Who The Promotions Regime Applies To
From the 8th October 2023, all cryptoasset businesses that wish to market their services to UK Clients, must ensure that the promotion falls within the scope of one of the following:
The promotion is communicated by an FCA authorised person
The promotion is made by an unauthorised person but approved by a FCA authorised person
The promotion is communicated by a cryptoasset business registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds Regulation 2017 (MLRs)
The financial promotions regime applies to all businesses regardless of whether the business is based overseas or what technology is used to make the communication.
As of the end of November 2023 looking at the previous 12 months of applications sent to the FCA for admittance to the cryptoasset register only 10% of such applications resulted in admittance to the register, with another 10% being rejected and 80% withdrawn. Taking into account the admittance rate and requirements for registration set out in Regulation 8 and 9 of the MLRs, it may be prudent for those wishing to offer cryptoassets to the UK to consider obtaining communication approval from an FCA authorised person.
What Falls Within the Scope of Advertising?
The financial promotion rules do not apply to ‘image advertising’, however these are narrowly defined as communication consisting of:
The name of the business,
A logo or other image associated with the business,
A contact point,
A reference to the type of regulated activities provided by the business, or to its fees and commissions.
Any brand advertising or marketing material outside the above points is likely to be within the scope of the financial promotion rules.
The definition of a financial promotion is intentionally very broad, as the regime is designed to be technology neutral, it is expected that the vast majority, if not all, websites and apps that enable a UK consumer to invest in cryptoassets will be in the scope of the financial promotion’s regime.
What Can FAI Comply do for Your Business?
FAI Comply is able to offer the services of an FCA authorised person for those wishing to market cryptoassets to the UK with ease and without the hassle of registration, safely in line with FCA regulation.
We streamline the process, acting as a liaison between the FCA authorised person and the Business.
We assist with the preparation of material as well as Policies and applicable Procedures.
We support the planning and approach for the implementation of the relevant activities in line with FCA requirements, including regarding:
Oversight and responsibility,
Planning and timetable,
Financial promotion rules.
If you would like further information regarding obtaining communication approval from an FCA authorised person, please get in touch, we would be happy to assist.
Alternatively, if you would like further information regarding our FCA Licensing registration service, please click here, or contact us for further information.