FCA probes tech giants' compliance with promotion rules

The FCA said: "The exemptions were last reviewed in 2005 and we are concerned that they are no longer fit for purpose. One way to self-certify as a ‘sophisticated’ retail investor is for the consumer to confirm that they have made more than one investment in an unlisted company in the last two years.

"Previously, this would have required the consumer to have some private business experience. However, in recent years with the advent of investment-based crowdfunding, ordinary consumers can now easily meet this criteria.

"For example, our latest Financial Lives Survey, conducted in October 2020, shows that at least 1.6 million consumers hold investments in unlisted companies."


The regulator has repeatedly warned consumers that they should be prepared to lose all their money with cryptocurrencies and that they were unlikely to be protected.

However, within the report, the regulator also said it is working with the Treasury, the Bank of England and the Payment Systems Regulator as part of the UK Cryptoasset Taskforce (CATF) to consider the appropriate regime for cryptoassets used for payment.

“Cryptoassets and their underlying technology may offer potential benefits for financial services, and we will continue to encourage innovation in financial services and to support competition in consumers’ interests,” it said.

“As the use of cryptoassets and its underlying technology develops, we will continue to monitor the market and consider whether activities fall within our perimeter – a sometimes complex assessment to carry out. 

“We will continue to act where we see harm and where we have the powers to do so; however, our current powers over many types of cryptoasset-based activities are limited. We will also continue to work with the Treasury and other regulators to inform thinking on where further regulatory or legislative change is needed.”

The City watchdog also called for legislative change in areas such as extending the senior managers and certification regime to payment and e-money firms. 

The report stated the FCA was working with other agencies to prevent harm when issues fall outside its perimeter.

This included work with law enforcement agencies like the Serious Fraud Office, the National Crime Agency and the National Economic Crime Centre.

Since last year’s perimeter report, funeral plans and unregulated buy now, pay later has been brought under the FCA’s regulation.

The report will form the basis of a formal discussion between Nikhil Rathi and the economic secretary to the Treasury before the end of the year.

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