FSA publishes independent review of financial promotions compliance – On 19 January 2010, the FSA published the results of an independent three-year assessment of firms’ compliance with its financial promotions requirements. The review examined promotions made in the press and on the internet. The review concluded that there was a high level of compliance with the financial promotion rules. It did not identify any significant concerns, or any systematic breaches by particular firms or concerning particular products.

Specific issues highlighted by the review included:

1. Balance and clarity: Some promotions lacked balance, with product risks given insufficient prominence, or were unclear. This was an issue for both press and internet promotions. The FSA was disappointed at continuing failings on these issues, as they have been emphasised in previous reviews of internet advertising (see Practice note: Financial promotion: the internet and other electronic media: FSA reviews of website promotions).
2. Misleading claims: Some promotions gave misleading impressions about the product through use of past performance information, headline claims and unsubstantiated quotes. The use of out of date information to support claims was a particular issue for internet promotions.
3. Stand-alone compliance: Financial promotions should comply with the FSA’s rules on a stand-alone basis, without relying on cross-references to other documents for compliance.

The webpage also gives examples of good and poor practice in the following areas:

1. Presentation of information in an accurate, clear and balanced way.
2. Prominence and clarity of risk information.
3. Easy access of information in the “customer journey” through the website.
4. The FSA will now take the following actions:
5. Contacting certain firms where the review identified specific problems with their financial promotions.
6. Maintaining routine monitoring of press promotions, with a particular focus on financial promotions aimed at investment professionals placed in the quality press.

Carrying out a further thematic review of internet advertising and taking supervisory action against firms with non-compliant internet promotions. Those firms that the FSA does not contact should not assume that their internet promotions have met the FSA’s expectations.

Continuing further thematic work on spread betting. It intends to publish its findings shortly.

read more – http://www.fsa.gov.uk/Pages/Doing/Regulated/Promo/independent_compliance/index.shtml