Financial promotions: the UK rules explained

What counts as a financial promotion

The test comes from the restriction in section 21(1) of the Financial Services and Markets Act 2000 (FSMA):

A person (“A”) must not, in the course of business, communicate an invitation or inducement to (a) engage in investment activity, or (b) to engage in claims management activity.

Four parts of that sentence decide whether something is a promotion.

• In the course of business. A friend recommending a fund over dinner is not caught. A firm, or someone paid by one, usually is.
• Communicate. The Act says this “includes causing a communication to be made” (section 21(13)). A firm that pays an affiliate or influencer to post can be the one communicating.
• An invitation or inducement. Purely factual information is not an inducement, provided the facts are not presented so that they invite or induce the reader to act (PERG 8.4.2G). A post that encourages the reader to act usually is one.
• Investment activity. Entering or offering to enter into an agreement whose making or performance is a controlled activity, or exercising rights conferred by a controlled investment to acquire, dispose of, underwrite or convert a controlled investment (section 21(8)). Since the Financial Services and Markets Act 2023 amended section 21, “investment” expressly includes cryptoassets (section 21(14)).

The format does not matter. A banner, a TikTok video, a podcast read, an email and a web page are judged by the same test. In the FCA's words, its financial promotion rules “are technology neutral and apply across all channels used to advertise, including social media” (FG24/1, paragraph 1.1).

Who may communicate one

1. An authorised firm communicates itA firm authorised by the FCA or the PRA, following the FCA's financial promotion rules (section 21(2)(a)).
2. An authorised firm approves itThe approver needs the FCA's permission under section 55NA, unless an exemption covers it (section 21(2)(b) and (2A)).
3. An exemption appliesFor example, a promotion made only to investment professionals (Financial Promotion Order 2005, article 19).

✕ Outside these routes, communicating it is a criminal offence (section 25).

The second route is how introducers, start-ups, retailers and influencers promote lawfully: an authorised firm checks their promotion and approves it. The permission requirement, which the FCA calls the financial promotions gateway, has applied since 7 February 2024 (section 21(2A) and section 55NA). See section 21 approval and the gateway for who needs the permission and what approvers must do.

The third route's exemptions are in the Financial Promotion Order 2005. They are narrow, and several do not apply to high-risk products such as cryptoassets.

Promotions made from abroad can be caught. Section 21(3) applies the restriction to a communication originating outside the UK “only if the communication is capable of having an effect in the United Kingdom”. In practice, an overseas firm whose adverts reach UK consumers should assume its adverts are in scope.

The standard every promotion must meet

Each FCA conduct sourcebook has its own version of the same rule. For investments it is COBS 4.2.1R:

A firm must ensure that a communication or a financial promotion is fair, clear and not misleading.

The credit version spells out what the standard means in practice. Under CONC 3.3.1R(1A), a promotion must be clearly identifiable as a promotion, accurate and balanced, and must not “emphasise any potential benefits of a product or service without also giving a fair and prominent indication of any relevant risks”. Nor may it “disguise, omit, diminish or obscure important information, statements or warnings”. The rest of CONC 3 is covered in consumer credit and buy now pay later promotion rules.

What the investment rules require in detail

For investment promotions, COBS 4 turns the standard into specific requirements. The main ones:

The FCA's guidance adds that a promotion for a product that puts capital at risk should make that clear (COBS 4.2.4G(1)), and should use “guaranteed”, “protected” or “secure” only where the word is a fair description, with everything needed to make it so (COBS 4.2.5G).

Extra rules for high-risk investments

The FCA puts some products into higher-risk categories and adds rules on top of COBS 4.2.

Restricted mass market investments, such as peer-to-peer loans, non-readily realisable securities and qualifying cryptoassets, may be promoted to retail clients only with a prescribed risk warning and a set process before anyone invests. With narrow exceptions, the promotion must not offer “any monetary or non-monetary incentive” to a retail client, so no refer-a-friend bonuses or sign-up rewards (COBS 4.12A.7R).

Non-mass market investments, such as non-mainstream pooled investments and speculative illiquid securities, may be promoted to retail clients only where an exemption applies, for example to certified high net worth or sophisticated investors (COBS 4.12B.7R).

Contracts for difference have their own prescribed warning, covered in CFD risk warning wording. Cryptoassets are covered in crypto promotion rules in the UK.

The Consumer Duty applies to retail promotions

The Consumer Duty has applied since 31 July 2023 (31 July 2024 for closed products) to firms that produce, approve or distribute communications to retail customers (PS22/9). That includes financial promotions, in any channel, “including electronic communications, such as on social media” (PRIN 2A.5.1R). Its core requirement:

A firm must support retail customer understanding so that its communications: (a) meet the information needs of retail customers; (b) are likely to be understood by retail customers; and (c) equip retail customers to make decisions that are effective, timely and properly informed.

The Duty asks not only whether an advert contains the required words but whether the people who see it will understand it. Where appropriate, firms must test communications before sending them and monitor them afterwards (PRIN 2A.5.10R).

The advertising codes apply too

The Advertising Standards Authority enforces the CAP Code on non-broadcast adverts and the BCAP Code on broadcast ones. For financial adverts, the FCA and the ASA divide the work.

• The FCA covers the technical content. The CAP Code tells marketers to “have regard to” section 21 and the Financial Promotion Order “as reflected in the rules and guidance issued and enforced by the Financial Conduct Authority”. Section 14's own rules apply only “to financial marketing communications that are not regulated by the FCA and to marketing communications for debt advice” (CAP Code, section 14, background).
• The ASA covers the rest. The same background note goes on: “All financial marketing communications are, however, subject to Code rules that cover non-technical elements of communications; for example, serious or widespread offence, social responsibility and the truthfulness of claims that do not relate to specific characteristics of financial products.”

One CAP rule matters on every channel: “Marketing communications must be obviously identifiable as such” (CAP 2.1). It is why a paid post needs a clear label such as “#ad”, as the ASA's influencers' guide explains.

Who gets caught, and how often

The FCA published promotions figures each quarter, with a full-year summary, until February 2025 (previous data). The last full-year release covers 2024:

promotions amended or withdrawn by authorised firms after FCA intervention

19,766

on the 10,008 in 2023

+97.5%

of them from claims management firms

9,197

alerts about unauthorised firms and individuals

2,240

The same data shows that 20 finfluencers were interviewed under caution, and that the FCA issued 38 alerts against social media accounts that may contain unlawful promotions.

Enforcement has continued since. In June 2025, nine regulators, including the FCA, held an international week of action against illegal finfluencers (FCA, 6 June 2025). By the FCA's later count, the week led to three arrests and 650 social media takedown requests. Over 2025 as a whole, the FCA issued 2,329 warnings about unauthorised or potentially scam firms (FCA, 9 July 2026).

Breaching section 21 is a criminal offence for whoever communicates the promotion, individual or company. Under section 25, the maximum sentence on indictment is two years' imprisonment, a fine or both. There are two defences: that the person believed on reasonable grounds that the content was prepared by an authorised person, or approved by one in accordance with section 21(2A); or that they took all reasonable precautions and exercised all due diligence to avoid committing the offence.

How firms check promotions before they go out

Every review answers the same five questions about the promotion as people will see it. The financial promotions checklist breaks them into 20 checks.

1. Can it be communicated at all?Is it a financial promotion? Is the firm communicating its own or approving someone else's? Which markets does it reach? Each can bring its own rules.
2. Will the audience understand it?Fair, clear and not misleading for the people who will see it, on the channel it runs on.
3. Are the risks as prominent as the benefits?Every benefit balanced by its risks, and every required warning present and legible in the format the customer actually sees.
4. Do the claims stand up?Every statement backed by evidence, every comparison fair.
5. Is the decision on record?The version approved, the issues raised, how each was resolved and who decided.

Connor reads a promotion (an image, video, PDF, web page or social post) and works out which rules apply from the firm's home regulator, the markets it targets and the products it promotes. It lists each problem with the rule it breaks and the fix. A person at the firm makes the decision, and Connor keeps the record.