The Financial Conduct Authority’s recent policy changes regarding high-risk investments are particularly relevant to several key groups. First, they affect consumers who are currently investing in, or considering investing in, high-risk financial products. The changes will also impact firms that are authorized to approve financial promotions for unauthorised individuals, known as Section 21 approvers, whether these promotions involve high-risk investments or not.
In addition, the new rules will apply to issuers of certain investment types, such as non-mainstream pooled investments, speculative illiquid securities, and non-readily realisable securities. Investment-based crowdfunding (IBCF) platforms, along with other intermediaries distributing high-risk investments to consumers, will also be affected. The changes will further impact peer-to-peer (P2P) lending platforms and trade bodies representing the IBCF and P2P sectors.
Beyond these groups, the final rules will be of interest to firms in the cryptoasset sector and their trade bodies, any authorized firms in the consumer investments space, and investment companies, along with their respective trade bodies. Financial advisers and firms managing Long-Term Asset Funds will also need to take note of these updates.
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