Who: the Financial Conduct Authority (“FCA”) and the Advertising Standards Authority (“ASA”)
Where: United Kingdom
When: 3 December 2014
Law stated as at: 27 January 2015
The FCA published a memorandum of understanding (“MoU”) between itself and the ASA, setting out how both organisations will carry out their respective responsibilities in relation to UK non-broadcast advertising.
The ASA regulates all UK advertising, both broadcast and non-broadcast. It administers the “CAP” Codes of Broadcast and Non broadcast advertising. Compliance with these Codes is compulsory for all UK advertisers.
The FCA is the UK’s financial regulator, responsible for maintaining the integrity of the UK financial markets, protecting consumers and promoting healthy competition between financial services providers. The FCA’s work includes regulating conduct related to financial promotions.
There is therefore some overlap in the FCA’s and ASA’s respective remits.
The FCA is the lead regulator in relation to non-broadcast financial promotions, whilst the ASA’s work in this context complements that of the FCA by covering “non-technical” elements of financial promotions, such as matters of serious or widespread offence, social responsibility and the truthfulness of claims that do not relate to specific characteristics of the financial product itself.
The “technical aspects” dealt with by the FCA include ensuring that financial promotions comply with requirements in the Financial Services and Markets Act 2000 (“FSMA”) and the Consumer Credit Act 1974 (the “CCA”).
In the realm of broadcast advertising the ASA’s role is co-regulatory so it has jurisdiction in respect of all financial promotions, but it may seek advice from the FCA.
The MoU sets out arrangements for co-operation and co-ordination between the two authorities in carrying out their regulatory obligations and also sets out arrangements for the exchange of information between the two.
The MoU covers: multi-media campaigns; provisions of advice; information sharing; policy and rule making; investigations and enforcement; and confidentiality.
Measures under the MoU include, for instance, that the ASA will refer to the FCA complaints about deposits, investment business, mortgages, general insurance, consumer credit and pure protection policies, where the complaint is that the promotions are unclear, unfair or misleading or where impermissible comparisons have been made. The FCA on the other hand will refer to the ASA all matters concerning financial promotions that fall outside this remit.
Why this matters:
Having an agreed framework for co-operation and co-ordination between the two regulators enables each to understand and respect the other’s role and responsibilities, helping to avoid any duplication of effort that might occur due to the overlapping mandates. It will also provide greater clarity for financial services providers on how they will be regulated.
The FCA and ASA plan to review the MoU annually, meaning that both regulators can adapt the way they interact to take account of developments in the UK’s fast changing media and financial regulatory landscape.