‘Finfluencers’ lead UK watchdog to tighten social media rules

THE UK markets watchdog said it would update social media guidance to deter “finfluencers” from promoting financial products that harm consumers.

The Financial Conduct Authority (FCA) is consulting on reforms for the next eight weeks and wants to reflect how social media is used now, the regulator said in a statement on Monday (Jul 17). 

The FCA asked firms to amend or remove 8,582 promotions last year – 14 times more than 2021 – as it targeted a growing number of Internet personalities posting ads that broke its rules. Its current social media guidelines were issued in 2015.

“For those touting products illegally, we will be taking action against you,” said Lucy Castledine, director of consumer investments at the FCA.

From Oct 8, the FCA will ban incentives to invest in crypto, such as “refer a friend” bonuses. Firms must also introduce clear risk warnings and a 24-hour cooling period, to give first-time investors the time to consider their investment decision. BLOOMBERG