Financial Promotion

Section 21 FSMA 2000, headed "Restrictions on financial promotion", provides that "a person ("A") must not, in the course of business, communicate an invitation or inducement to" engage in investment activity, subject to exceptions. The restriction does not apply if "(a) A is an authorised person; or (b) the content of the communication is approved for the purposes of this section by an authorised person." A communication originating outside the UK is only caught if it is capable of having an effect in the UK. The prohibition is backed by criminal sanctions and, since amendments introducing sections 55NA and 55NB, an authorised person can only approve another firm's financial promotion where permitted under the FCA's gateway for approving financial promotions or an exempted category — a reform tightening who may lawfully approve promotions made by unauthorised firms.

In practice, the financial promotion regime governs adverts, websites, social media posts, and direct communications inviting consumers or investors to buy shares, funds, insurance, cryptoassets (where in scope), or other investments. Unauthorised firms — including many fintech start-ups and introducers — cannot lawfully promote investment activity unless their content is first approved by an FCA-authorised firm, and the FCA treats breaches of section 21 as a serious enforcement priority, particularly for high-risk investments and unauthorised financial influencers.