The impact of the FCA's new rules on what they term
'Speculative Illiquid Securities'
Background
Financial promotions are any communication of an invitation or
inducement to engage in investment activity. Section 21 of FSMA
2000 prohibits a person from issuing a financial promotion unless
it has been approved by an (FCA) authorised person, or is exempt
from the prohibition. The exemptions are set out in the Financial
Promotion Order 2005 (FPO).
In addition to the above, the FCA uses powers to impose rules on
the communication of financial promotions through its Conduct of
Business Sourcebook (known as COBS). These rules include what the
FCA expects to see in relation to financial promotions which
require approval by an authorised person (e.g. financial promotions
must be fair, clear and not misleading), and rules relating to
certain investments.
