Reed Smith Client Alerts

The newly appointed CEO of the FCA starts in October and has to bring about much needed improvements in the protection of retail investors as this is one of the FCA’s top priorities. Glaring weaknesses in the current investor protection regime have seen scandals such as the promotion by FCA firms of low-quality, high-risk mini-bonds. This alert comments on four initiatives to protect retail investors:

  1. The FCA’s ‘consumer harm campaign’
  2. An HM Treasury consultation paper proposing restrictions on the financial promotions regime
  3. A permanent ban on the promotion of speculative illiquid securities to retail investors
  4. A consultation paper proposing to bring certain unregulated cryptoassets within the financial promotion perimeter

作者: David Calligan Claude Brown Tim Dolan Karen Butler Emily E. Cartwright

Consumer harm campaign

In its 2020/21 business plan, the FCA sets out plans to help consumers make effective investment decisions and to prevent exposure to risky, poor value investment products.

The FCA has decided to raise over £11 million from authorised firms over a five year period to fund its consumer harm campaign, which will involve communicating information to educate retail investors on what a good investment proposition looks like.

Education is doubtless needed and this campaign will be supported by interventions to protect consumers from high risk investments (HRIs).