In a move aimed at ensuring transparency and fairness in the crypto market, the United Kingdom’s Financial Conduct Authority (FCA) has released a comprehensive handbook outlining the rules that crypto firms must adhere to when promoting digital assets. The FCA’s Guidance emphasizes the core requirement that promotions related to crypto assets must be fair, clear, and devoid of any misleading information.
Crypto Promotion Guidelines
This finalized non-handbook guidance, titled “Cryptoasset Financial Promotions,” sets clear expectations for communication and approval of financial promotions concerning qualifying crypto assets. Importantly, the guidance builds upon existing regulatory obligations without introducing new ones. It offers insights into how authorized persons can ensure that financial promotions align with the rules as laid out in PS23/6, which covers financial promotion rules for crypto assets.
Furthermore, the FCA highlights the significance of complying with the Consumer Duty and offers insights into the steps authorized persons should take to meet their obligations under this duty. This move reflects the FCA’s commitment to safeguarding consumer interests and maintaining the integrity of the financial services industry.
The guidance is a culmination of efforts initiated on June 8, 2023, when the FCA released its final rules for cryptoasset financial promotions. These rules mandate that financial promotions must be fair, clear, and non-misleading. To ensure firms fully comprehend the implications of these requirements, the FCA also conducted a consultation on the proposed guidance.
Following the closure of the consultation on August 10, 2023, the FCA considered the feedback received, leading to the publication of the finalized guidance outlined in Chapter 2. The Annex summarizes the feedback received and the FCA’s responses.
It is essential to note that the guidance does not impose new obligations but pertains to existing regulatory responsibilities. However, firms adhering to this guidance in the appropriate circumstances will be deemed to have complied with the relevant rules and requirements.
Notably, the FCA’s secondary international competitiveness objective, which occurred on August 29, 2023, was not in place when the final rules were published. Nevertheless, the FCA has integrated the spirit of this objective in its approach to safeguarding consumers while allowing for beneficial innovation that supports long-term economic growth in the UK.
The release of this guidance, aligned with the FCA’s primary objective of reducing consumer harm, aims to enhance compliance with existing rules and improve overall consumer outcomes. By ensuring that promotions are clearer and fairer, consumers can make better-informed decisions that align with their needs and risk profiles, thereby reducing the risk of trust erosion in the financial services industry and supporting long-term economic growth in the UK.
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