At the FSA Financial Promotions Conference, Nausicaa Delfas (Head of TCF Strategy, Financial Promotions and Unfair Terms) discussed the new financial promotions regime and focused on:

  • Why financial promotions matter.
  • Principles-based regulation and financial promotions.
  • Key recurring issues.
  • New regime for investment products.
  • Financial promotions and TCF.
  • Senior management responsibility.
  • Management Information.
  • The FSA’s strategy.
  • Collaboration with other regulators
  • The FSA’s supervisory approach.
  • The FSA’s plans for the future.

The key point made by Ms Delfas in her speech is that in supervising the financial promotions regime, the FSA will continue to focus on whether a promotion is "fair, clear and not misleading", senior management responsibility and treating customers fairly. Also in her speech she mentioned that the following high level requirements are at the heart of the concept of "fair, clear and not misleading":

  • The communication must be accurate and sufficient for its purpose.
  • The communication must be presented in a way that is likely to be understood by the average member of the group to whom it is directed.
  • Where benefits are discussed, there must be a fair and prominent indication of any relevant risks.
  • Firms must not disguise, diminish or obscure important items, statements or warnings.

In relation to defining TCF she notes that the key cultural risk is in the relationship between marketing and compliance. She then identifies some of the key questions which the FSA expects senior management to have answers to.

In her conclusion Ms Delfas notes that with the move to more principles-based regulation firms will have to stand back and look at what their promotions convey as a whole. Firms should be in a position to justify them based on outcomes.

View Financial Promotions: Principles in Action