Last week the Financial Conduct Authority (FCA) published a second "Dear CEO" letter relating to financial promotions. This letter follows up on the FCA's "Dear CEO" letter of January which was directed at all firms issuing financial promotions (see our update here).

Last week's letter was another reminder of the importance of complying with the financial promotions rules. However, this time the FCA directed its communication at firms approving financial promotions for unauthorised persons. Despite the letter published in January specifically reminding these firms of their obligations under the financial promotions rules, the FCA has identified an ongoing trend of firms falling well below the FCA's expectations and standards.

For those in the sector, it is important to take from this that the FCA has identified financial promotions as an ongoing focus area and its letter in January was not a one-off. Firms issuing financial promotions will need to take care that they are complying fully with the relevant financial promotions rules. In addition, and significantly, firms approving financial promotions for unauthorised persons will need to be alive to the FCA's expectation that such firms should carry out sufficient due diligence before giving approval, to confirm that the promotion is fair, clear and not misleading.

The FCA has said that it will take action where it identifies non-compliance in this area which may include bringing civil or criminal proceedings. It is clear that while there may be areas of regulatory uncertainty resulting from Brexit, the FCA is still retaining a focus on existing and continuing domestic regulation.