Financial promotions approval

Thornbridge can assist clients with the preparation and verification of financial promotions prior to distribution to potential investors.

Overview

The FCA handbook states that a financial promotion is a communication of “an invitation or inducement to engage in investment activity that is communicated in the course of business.”

Financial promotions are regulated by the Financial Services Markets Act 2000 (FSMA).

The Financial Services Market Act 2000 Section 21 of FSMA sets out the general restriction on financial promotions and can be summarised as follows (the “Financial Promotion Restriction”): “A person must not in the course of business communicate an invitation to engage in investment activity unless he is an authorised person, or the content of the communication has been approved by an authorised person, or the communication is covered by an exemption.”

The financial promotion restriction applies to all forms of communication such as advertising, broadcasts, websites, emails, information memorandums, teasers and all other forms of written or oral communication whether sent to one person or many.

If a person who is not an authorised person (i.e. authorised by the FCA) communicates, or causes someone else to communicate, a financial promotion, in breach of the Financial Promotion Restriction, they will be:

  • committing a criminal offence unless an authorised person has approved the content of the financial promotion or it is covered by an exemption,
  • liable for a fine, up to two years’ imprisonment, or both.

Section 21 of FSMA does not allow the promotion of UCIS by ‘unauthorised persons’.

As an authorised person Thornbridge can issue and approve financial promotions for the purpose of Section 21 of FSMA. Thornbridge conducts a detailed due diligence on the statements made in the investor documentation to ensure that the financial promotion is fair, clear and not misleading to meet all regulatory standards.

If you are interested in the verification of financial promotion service that Thornbridge offers please contact us for further information.