FCA chief: Financial promotion rules must apply online
The head of the City regulator has called on the Government to provide more protection for consumers online in the face of an increasing number of risky investment offers.
Speaking at UK fintech week, Nikhil Rathi reiterated the need for financial promotion rules to apply to both digital and more traditional media.
“In a low interest rate environment, we have seen a growing number of investors search for better returns online. Too many of these investment opportunities prove too good to be true,” he said.
Online platforms were previously exempt from the financial promotions regime before Britain’s departure from the EU.
“We see no reason why different standards should apply to a search engine or social media compared to a newspaper,” the FCA chief said. “If these platforms choose to display and profit from adverts for risky – and in some case fraudulent – investments, they should also comply with financial promotions rules.”
The regulator will now look at how social media platforms are adapting to rules and said “if needed, we will take action. Consumers – and firms – benefit when financial promotion rules apply fairly to both digital and traditional media.”
Last week pensions minister Guy Opperman told savers and pensioners to “be very careful” about what they read online. “They think they are accessing a legitimate investment company. Sadly for many they are not,” he tweeted. He added that Google “can no longer be trusted as they don’t vet their advertisers”.