Regulations have been made that remedy an omission from the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 post-Brexit.
The financial promotion restrictions in section 21 of the Financial Services and Markets Act 2000 provide that it is a criminal offence for a person to communicate an invitation or inducement to engage in investment activity, unless:
- the person is an authorised person;
- the content of the communication is approved by an authorised person; or
- the communication is covered by an exemption.
The Financial Promotion Order details the exemptions and includes exemptions for communications relating to investments or instruments which are traded on ‘relevant markets’. For these purposes, relevant markets are (broadly speaking) those in an EEA state.
Following the UK’s withdrawal from the EU, UK markets (such as the London Stock Exchange) were accidently omitted from the definition of relevant market, leaving financial promotions related to UK markets, or investments traded on such UK markets, without the benefit of these exemptions.
Over the summer the Financial Conduct Authority acknowledged the issue, and confirmed that it would not take enforcement action against anyone for breach of the financial promotion restrictions as a result of this omission.
This omission has now been formally rectified through the Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021, which will come into force on 18 October 2021.