This statutory instrument, The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2024, formally amends the existing Financial Promotion Order 2005 by introducing specific changes to how financial promotions are regulated under the primary Financial Services and Markets Act 2000 framework, likely updating exemptions or conditions related to certain types of communication.
Arguments For
Update regulatory frameworks to reflect current financial practices and market conditions, ensuring promotions remain appropriate.
Reducing unnecessary regulatory burden on firms engaging in certain types of legitimate financial promotions, potentially encouraging market activity.
Aligning UK financial promotion rules with international standards or addressing specific practical issues identified since the original order was implemented.
Arguments Against
Potential for increased risk to retail consumers if safeguards against misleading or overly aggressive financial promotions are unintentionally weakened.
Complexity in implementation for firms needing to rapidly assimilate changes to long-standing FCA conduct rules.
Risk of regulatory arbitrage if the changes make the UK jurisdiction less stringent than comparable international financial centers.
S.I. 2024 / No. XXXX
FINANCIAL SERVICES AND MARKETS
The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2024
[Date]
[Date]
Made [Date]
Laid before Parliament [Date]
Coming into force [Date]
This section identifies the document as a Statutory Instrument (S.I.), referencing its official number (XXXX) and the year it was made.
It confirms the subject matter relates to Financial Services and Markets, names the specific amending Order passed in 2024, and details the key dates for its official declaration and when it becomes legally effective.
The Secretary of State, in exercise of the powers conferred by section 21(1) and (6) of the Financial Services and Markets Act 2000(a), makes the following Order:
The relevant Secretary of State is exercising the authority granted by Sections 21(1) and 21(6) of the Financial Services and Markets Act 2000.
These powers specifically allow the Secretary of State to issue regulations concerning financial promotions, which is the purpose of this legislative amendment.
PART 1
General
1. Citation and commencement
(1) This Order may be cited as the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2024 and comes into force on [Date].
(2) This Order amends the Financial Promotion Order 2005(b).
The first operative section names this new legislation as the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2024 and specifies its commencement date.
It explicitly states that the legal goal of this instrument is to make changes to the standing Financial Promotion Order issued in 2005.
2. Amendments to the Financial Promotion Order 2005
(1) The Financial Promotion Order 2005 is amended as follows.
(2) In Article 38 (definitions), for the definition of “qualifying body” substitute—
““qualifying body” means a body which—
(a) is a body corporate established under the law of an EEA State;
(b) is regulated in that EEA State for the provision of investment services; and
(c) is supervised by a competent authority for the purposes of the Markets in Financial Instruments Directive (No 2) Regulations 2004(c).
”
This requires amending the Financial Promotion Order 2005, specifically focusing on definitions within Article 38.
The definition of a “qualifying body” is being substituted with a new version.
The revised definition requires the body to be incorporated in an EEA State, authorized there to provide investment services, and subject to oversight by an official authority under specific EU-derived regulations (Markets in Financial Instruments Directive (No 2) Regulations 2004).
(3) In Article 44 (Communication of information to professional clients)—
(a) in paragraph (2), for “Subject to paragraph (3),” substitute “Subject to paragraphs (3) and (5),”.
(b) after paragraph (4) insert—
“(5) This article does not apply where the communication is made to a person who, at the time the communication is made, is a professional client solely because they are to be treated as a professional client by virtue of Article 19(5) of the Financial Promotion Order 2005.”
Changes are introduced to Article 44, which deals with how information is communicated to professional clients.
The introductory clause of paragraph (2) is adjusted to reference an additional exemption, paragraph (5).
A new paragraph (5) is then inserted, which clarifies that Article 44—the rules for communicating to professionals—does not apply if the recipient is categorized as a professional client only because they are treated as such under the specific provisions outlined in Article 19(5) of the 2005 Order, likely linking the exemption to a specific type of professional status.
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