Previously, any firm authorised by the FCA could approve promotions on behalf of firms unregulated by the FCA.

The regulator said that this has caused harm, with firms approving adverts for products they do not understand, as well as adverts that are unclear, unfair or misleading.   

As a consequence firms approving financial marketing for unregulated firms will from early next year have to demonstrate they have the necessary skills and expertise to approve adverts.

Those signing them off must understand the product, to ensure the promotion is accurate and fairly balances risk and reward, the FCA said.

Firms will need to apply to the FCA between 6 November and 6 February 2024 to continue approving adverts ahead of the new rules coming into force on 7 February.

Firms which 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, helping the FCA to move faster to crack down on rogue adverts.  

Sarah Pritchard, executive director of markets at the FCA, 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.” 

Firms will be able to apply after the February deadline but will not be able to approve adverts before their application is determined. New firms looking to enter the market will be able to apply as part of the normal application process for authorisation. 

Details on how to apply are here.