Applying to approve financial promotions for unauthorised persons

The legislation
You need to understand if you're approving, or intend to approve, financial promotions for unauthorised persons for the purposes of Section 21 of FSMA, and whether any of the exemptions apply to you.

Note that Treasury made some clarifying changes to the exemptions in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) (No. 2) Order 2023.

Our website
Review any relevant webpages and our approach to assessing applications in our policy statement.

Our Handbook and relevant guidance
In particular, refer to SUP 6A and SUP 16.31 as well as the financial promotion rules relevant to your sector, which may include chapter:

• 4 of the Conduct of Business sourcebook (COBS)
• 2 of the Insurance: Conduct of Business sourcebook (ICOBS)
• 3A of the Mortgages and Home Finance: Conduct of Business sourcebook (MCOB)
• 2 of the Banking: Conduct of Business sourcebook (BCOBS)
• 3 of the Claims Management: Conduct of Business sourcebook (CMCOB)
• 4 of the Funeral Plan: Conduct of Business sourcebook (FPCOB)
• 3 of the Consumer Credit sourcebook (CONC)

Consider seeking independent legal/compliance advice
Where relevant, you should consider seeking independent legal/compliance advice as part of preparing your application.

Ensure you have the competence and expertise to approve promotions of the type(s) you're applying for permissions for
You must assess this and we'll consider it carefully. In general, we expect the types of financial promotions that firms intend to approve to align with the investment types in relation to which they have permission to carry on regulated activities. For example, we wouldn't usually expect a firm with only consumer credit permissions to apply for permission to approve financial promotions relating to investments such as shares and debt securities.

If you are an existing authorised person looking to apply for approver permission you should create and complete a Variation of Permission (VOP) application on Connect. Once the VOP form has been completed it will generate a Financial Promotions application that will need to be completed and submitted alongside the VOP.

If you are applying for part 4A authorisation you will be asked to confirm whether you will be approving financial promotions for unauthorised persons during your application for authorisation. If you indicate you are intending to do so, you will then be directed to a financial promotions form as part of your initial application.

Make sure it covers the areas below.

Fully explain the types of promotion your firm intends to approve
Include how many promotions you expect to approve and the revenue you expect to generate from approving promotions. Where applicable, specify the marketing restrictions that apply to any of the investment types for which you intend to approve promotions.

Expertise to approve promotions
Explain in detail what expertise your firm has to approve the type of promotions for which you're applying for approver permission. We'll consider what professional qualifications or work experience any relevant individuals have, so it's up to you to demonstrate that they have sufficient relevant expertise.

Policies, systems and controls
You must have appropriate policies to ensure the promotions you intend to approve are clear, fair and not misleading, and otherwise comply with applicable financial promotion rules, as well as to withdraw approval from unauthorised persons where required. You should also be able to demonstrate how you'll monitor the financial promotions you approve on an ongoing basis.

Historic approvals
Provide details of any approvals you've given over the past 12 months. We'll use this to assess whether the historic approvals have potentially caused harm, and this could result in us refusing your application.

Make sure you've included everything
Fully answer all the questions on the application form and include any relevant supporting information. All documents and information should be up to date when you submit your application, and should be final versions that you've reviewed and signed off. We won't accept draft documents.

Be self-reliant
It's up to you to submit an comprehensive application of the highest quality. Please don't expect us to guide you through completing your application, or to recommend solutions or mitigating actions when we identify concerns with, or deficiencies in, an application.

Ask yourself, do you meet our standards to be granted approver permission?
You should demonstrate how you meet our minimum standards (known as our threshold conditions). We may refuse an application for approver permission if it appears to us that it's desirable to do so in order to advance one or more of our operational objectives.

We'll let you know if and when we require further information, and keep you updated on a regular basis.

Keep us up to date
You should be proactive and transparent in all your dealings with us. Make sure you tell us in good time about any relevant changes in your circumstances, or any new information that could affect our assessment.

From 7 February 2024

Our Financial Services Register has been updated to provide information about the ability of authorised firms to approve financial promotions for unauthorised persons.

Reporting requirements also came into force for firms which applied for approver permission before 7 February 2024 and which are benefiting from the transitional regime (see SUP 16.31). For other firms, reporting requirements begin to apply at the point at which they are granted permission to approve financial promotions.