The Financial Conduct Authority (FCA) has warned that some firms are engaging in "unlawful" and "misleading" marketing practices with regard to the promotion of unregulated financial products.
In a letter from chief executive Andrew Bailey (pictured) to the CEOs of all regulated firms on Wednesday (9 January), the regulator said some firms are issuing financial promotions that falsely imply all of the activities they undertake are regulated by the FCA or the PRA when, in fact, they are not.
The FCA warned that while it does not "approve" promotions, it has the power to force firms to "withdraw an advert…or to prevent it from being used in the first place".
It reminded firms that financial promotions must be "fair, clear and not misleading", which includes "ensuring that those to whom a financial promotion is addressed, or at whom it is directed, understand the extent of the relevant firm's business that is regulated".
The FCA added senior managers and boards are held accountable for ensuring promotions are "fair, clear and unambiguous".
Commenting on the letter, executive director of supervision, retail and authorisations, at the FCA Jonathan Davidson said: "It is completely unacceptable for firms, which are regulated for some of their business, to market unregulated investments by implying to customers that all their business is regulated.
"We are committed to stamping out this misleading practice and recommend that customers should ask firms whether what they are buying is really regulated by the FCA."