Back in September, we wrote about BCAP's consultation about its plans to amend rule 14.5.4 in the BCAP Code, which restricts advertisements for certain types of financial products to specialised financial channels, stations and programming.
BCAP wanted to clarify that the restriction in rule 14.5.4 applies to unregulated products that would be regarded as investments, in a conventional sense. 'Investment activity' defined under the Financial Services and Markets Act 2000 includes services unlikely to be regarded by the public as investments. Therefore, the wording of the BCAP Code unintentionally restricted ads for products that do not conform with the type of high-risk investments the rule was intended to keep away from mass audiences. For example, it would disproportionately restrict ads for unregulated buy-now-pay-later (BNPL) credit services from advertising in broadcast media.
BCAP received two responses to its consultation, both of which agreed with the proposed change.
The amendments to rule 14 now clarify the scope of the existing restriction on ads for investments unregulated by the FCA, to ensure that it applies in practice to unregulated 'investments' that meet the likely consumer understanding of that term. That is, an opportunity for the consumer to invest their capital in the expectation of making a profit.
BCAP says that it is aware of the need to avoid unintended consequences of amending the wording of rules and to ensure that changes are effective. As such, the amended rules will be subject to review after 12 months.
The changes apply with effect from 26 March.
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