BREAKING NEWS
This content is not available in your region

UK investors may have to sit a test before buying a high-risk product

Access to the comments Comments
Text size Aa Aa

LONDON (Reuters) -Investors may have to sit a test before they can buy high-risk financial products, Britain’s Financial Conduct Authority said on Thursday as it seeks to turn the tide on online scams and apply lessons from the costly collapse of investment fund London Capital & Finance.

“We are concerned that too often consumers are investing in high-risk investments they don’t understand and can lead to significant and unexpected losses,” Sheldon Mills, the FCA‘s executive director for consumer and competition, said in a statement.

The FCA said it was proposing to create new categories of investments that would face restrictions on marketing, and further segmenting the high-risk investment market from safer investments.

The watchdog is looking at ways to make risk warnings more effective.

“Other suggestions in the paper include requiring consumers to watch educational videos or to pass an online test to demonstrate sufficient knowledge about financial products,” the FCA said.

“This could help prevent consumers from simply clicking through and accessing high-risk investments that they do not understand.”

Under the current system, a firm authorised by the FCA can approve financial promotions made by unauthorised persons, a set-up that has drawn scrutiny from lawmakers.

“The FCA is seeking views on whether there should be more requirements for these firms to monitor a financial promotion on an ongoing basis, after approval, to ensure it remains clear, fair and not misleading,” the watchdog said.

(Reporting by Huw Jones; Editing by Edmund Blair)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.