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The FCA makes speculative mini-bond mass-marketing ban permanent



The UK Financial Conduct Authority announced making the ban of speculative mini-bond mass-marketing permanent.

Introduced in January 2020, the ban followed serious concerns that speculative mini-bonds were being promoted to retail investors who neither understood the risks involved, nor could afford the potential financial losses.

The new rules will apply from 1 January 2021 and include a small number of changes to the temporary ban, following the proposals made in June.

The changes include bringing listed bonds with similar features to other speculative illiquid securities, and which are not regularly traded, within the scope of the ban.

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Sheldon Mills, Interim Executive Director of Strategy and Competition at the FCA commented:

Sheldon Mills, FCA
Sheldon Mills

We’ve today confirmed our proposals to make the speculative mini-bond ban permanent and extend its scope.

These products are high risk and are often designed to be hard to understand.

Consumers should always be wary of any investment promising high returns while downplaying risks.

The FCA has identified protecting consumers form har in the investment market as a priority in its 2020/21 business plan. As part of that, the UK regulator is currently reviewing feedback to its Call for Input on how the consumer investments market can be improved.

The FCA stated:

The FCA has also made clear that online platforms, such as Google, play an increasingly significant role in communicating financial promotions to consumers.”

These firms need to do more to stamp out fraud and misleading adverts and bear clear legal liability for the financial promotions they highlight.

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The FCA makes speculative mini-bond mass-marketing ban permanent

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