PS20/15: High-risk investments: Marketing speculative illiquid securities (including speculative mini-bonds) to retail investors

Open consultation: CP20/8
Consultation closed
Policy Statement

This Policy Statement (PS) summarises the feedback we received to CP20/8 and confirms our final rules to permanently ban the mass-marketing of speculative illiquid securities (SIS) to retail investors. 

Read PS20-15 (PDF)

What we are changing

We want to prevent harm to consumers from investing in complex, higher-risk products that they do not understand and are not suitable for them. Investing in SISs can lead to unexpected and significant losses for retail investors.

Our temporary product intervention (TPI) for SISs came into effect on 1 January 2020 for 12 months. It prohibited SISs, including speculative mini-bonds, from being mass-marketed to retail investors. It also improved disclosure of key risks and costs to the limited number of retail investors who were still eligible to receive promotions for SISs under the TPI. We have now made those temporary rules permanent, with minor changes and clarifications.

Following the introduction of the TPI, we saw evidence that the harm caused by speculative mini-bonds had started migrating to some listed bonds, which were excluded from the TPI. In response, we have now brought certain listed bonds which are not regularly traded under the marketing restrictions in the permanent rules.

This is a key part of our work to reduce harm in the consumer investments market, which we identified as a priority in our 2020/21 Business Plan. 

Who this applies to

  • issuers of SISs, including issuers of listed bonds with similar features to other SISs which are not regularly traded
  • investment-based crowdfunding (IBCF) platforms and other intermediaries offering or otherwise providing services in relation to SISs
  • authorised firms which approve financial promotions for unauthorised persons issuing SISs 
  • trade bodies for the IBCF sector
  • issuers and distributors of non-mainstream pooled investments (NMPIs)

The final rules in this document will also interest:

  • investment exchanges
  • consumers and businesses investing or considering investing in SISs
  • consumer organisations
  • businesses which rely on funding from SISs in the form of on-lending or investment using the proceeds of the issue

Next steps

The permanent rules come into force on 1 January 2021

We will monitor compliance with the rules and take supervisory and/or enforcement action where necessary.