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UK markets watchdog says 'strong case' for regulating product promotions

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By Reuters
UK markets watchdog says 'strong case' for regulating product promotions
FILE PHOTO: Chief Executive of the Financial Conduct Authority Andrew Bailey speaks at a press conference at the Bank of England in London, Britain, February 25, 2019. Kirsty O'Connor/Pool via REUTERS/File Photo   -   Copyright  POOL New(Reuters)
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LONDON (Reuters) – Britain’s Financial Conduct Authority said there was a “strong case” for regulating how financial products are promoted following a surge in online promotions.

FCA Chief Executive Andrew Bailey said he was concerned with an “explosion” of high yield investments being offered online, but such promotions are currently unregulated.

“What concerns me is it is very hard to keep track of all these things,” Bailey told a news conference.

The FCA was in contact with major internet service providers about the issue, he said.

The collapse of investment firm London Capital & Finance (LCF) in January is being independently reviewed and one of its conclusions could be to make promotions a regulated activity, Bailey said.

“I am very concerned about it,” Bailey said

“There are investors attracted to this. I don’t blame them.”

The Financial Services Compensation Scheme last month said some people who put money into LCF may be entitled to payouts covering their losses if they received misleading advice.

The firm went into administration with losses of up to 237 million pounds from unregulated ‘mini bond’ investments.

(Reporting by Huw Jones, editing by Sinead Cruise)