The Financial Conduct Authority is introducing new screening checks for firms that approve financial adverts.
Under the forthcoming rules companies approving marketing for unregulated firms will have to apply to do so.
Previously, any firm authorised by the FCA could approve promotions on behalf of firms unregulated by it.
Now firms will have to demonstrate they have the necessary credentials and skills to approve adverts.
Those signing them off must understand the product, to ensure the promotion is accurate and fairly balances risk and reward.
Firms will need to apply to the FCA between 6 November 2023 and 6 February 2024 to continue approving adverts ahead of the new rules coming into force on 7 February.
Those firms that have submitted an application can continue to approve adverts after this window until they receive a decision on their application.
Firms approving financial promotions will also be required to report regularly on what they sign off and on any concerning adverts they cancel approval for.
This should help the regulator to move faster to crack down on rogue adverts.
According to the FCA these reforms build on the its recent work to strengthen advertising rules for high-risk investments.
And also its proposals to revamp social media guidance for promoting financial products and services online alongside action removing misleading adverts.
The regulator points out higher quality adverts and a more informed consumer base will help support a thriving market for people to invest and save.
Other initiatives to crackdown on misleading marketing or bogus financial products include the Financial Services and Markets Act 2023.
That included provisions to create a new gateway for authorised firms that wish to approve financial promotions for unauthorised firms.
The FCA launched a consultation on the new gateway in December 2022.
It also committed to setting and testing higher standards as part of its three- year strategy across financial services.
This aims to give consumers the confidence to make good financial decisions based on accurate and relevant information.
The Consumer Duty also attempts to boost consumer protection in financial services and means people should receive communications they can understand.
FCA executive director of markets Sarah Pritchard said: “By introducing these new checks, we will ensure people approving adverts have the right skills and understanding they need to do so.
“Firms need to make sure people are equipped with the right information at the right time, so they can make properly informed decisions.
“As we face the rising cost of living, consumers are having to make difficult decisions about their finances and how they pay for things, so this is more important than ever.”
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