Home FCA Handbook FPCOB FPCOB 4 FPCOB 4.2 Communications and financial promotions: the obligations
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FPCOB 4.2 Communications and financial promotions: the obligations

Fair, clear and not misleading rule

29/07/2022R

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

29/07/2022G

FPCOB 4.1.1R(2) does not limit the application of the fair, clear and not misleading rule under FPCOB 4.1.1R(1). So, for example, a financial promotion that could lawfully be communicated by an unauthorised person without approval will still be subject to the fair, clear and not misleading rule to the extent that it is a communication with a customer or covered individual in relation to regulated funeral plan activity.

29/07/2022G

If a communication or a financial promotion names the FCA, the PRA or both as the regulator of a firm or other provider, and refers to matters not regulated by the FCA, the PRA or both, the firm should ensure that the communication or financial promotion makes clear that those matters are not regulated by the FCA, the PRA or both.

29/07/2022G

Part 7 (Offences relating to Financial Services) of the Financial Services Act 2012 creates criminal offences relating to certain misleading statements and practices.

28/02/2025G

A firm is reminded of its obligations under ESG 4.3.1R in relation to a communication, or when it communicates or approves a financial promotion, that references the sustainability characteristics of a product or service.

Financial promotions to be balanced and with appropriate warnings

29/07/2022R

A firm must ensure that a communication or financial promotion:

  1. (1)

    includes the name of the firm;

  2. (2)

    is accurate;

  3. (3)

    is balanced and, in particular, does not emphasise any potential benefits without also giving a fair and prominent indication of any relevant risks;

  4. (4)

    is appropriate for, and presented at a level and in a form that is comprehensible to the average funeral plan customer;

  5. (5)

    does not disguise, omit, diminish or obscure important items, statements or warnings; and

  6. (6)

    where it contains a comparison or contrast, presents the comparison or contrast in a fair and balanced way and ensures that it is meaningful.

29/07/2022G

A firm should consider whether the omission of any relevant fact will result in a communication or financial promotion being insufficient, unclear, unfair or misleading.

Marketing communications

29/07/2022R

A firm must ensure that a financial promotion in relation to a funeral plan or regulated funeral plan activity is clearly identifiable as such.

Approving financial promotions

29/07/2022R
  1. (1)

    Before a firm approves a financial promotion, it must take reasonable steps to ensure that the financial promotion complies with the financial promotion rules.

  2. (2)

    If, subsequently, a firm becomes aware that a financial promotion no longer complies with the financial promotion rules, it must withdraw its approval and notify any person that it knows to be relying on its approval as soon as reasonably practicable.

29/07/2022R

A firm must not approve a financial promotion to be made in the course of a personal visit, telephone conversation or other interactive dialogue.

07/02/2024G
  1. (1)

    The effect of section 55NA of the Act is that a firm is unable to approve a financial promotion unless:

    1. (a)

      the firm is a permitted approver in relation to the financial promotion; or

    2. (b)

      an approver permission exemption applies.

  2. (2)

    SUP 6A contains guidance on applying for approver permission.

The reasonable steps defence to an action for damages

29/07/2022R

If, in relation to a particular communication or financial promotion, a firm takes reasonable steps to ensure it complies with the fair, clear and not misleading rule, a contravention of that rule does not give rise to a right of action under section 138D of the Act.

Cold calling

29/07/2022R

A firm must not make a cold call unless the recipient has an established existing client relationship with the firm and the relationship is such that the recipient envisages receiving cold calls.

Promotions that are not in writing

29/07/2022R

A firm must not communicate a solicited or unsolicited financial promotion that is not in writing, to a client outside the firm’s premises, unless the person communicating it:

  1. (1)

    only does so at an appropriate time of the day;

  2. (2)

    identifies themself and the firm they represent at the outset and makes clear the purpose of the communication;

  3. (3)

    clarifies if the client would like to continue with or terminate the communication, and terminates the communication at any time that the client requests it; and

  4. (4)

    gives a contact point to any client with whom they arrange an appointment.

Record keeping: financial promotions

29/07/2022R
  1. (1)

    A firm must make an adequate record of any financial promotion it communicates or approves, other than a financial promotion made in the course of a personal visit, telephone conversation or other interactive dialogue.

  2. (2)

    For a telemarketing campaign, a firm must make an adequate record of copies of any scripts used.

  3. (3)

    A firm must retain the record in relation to the financial promotion for six years.

29/07/2022G

A firm should consider maintaining a record of why it is satisfied that the financial promotion complies with the financial promotion rules.