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FMA PUBLISHES GUIDANCE ON FAIR DEALING IN ADVERTISING AND COMMUNICATIONS FOR LICENSED CROWDFUNDING SERVICES AND PEER-TO-PEER LENDERS
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The Financial Markets Authority (‘FMA’) on 15 March 2018 published a guidance note on fair dealing in advertising and communications to customers for licensed crowdfunding and peer-to-peer lending platforms, and companies that offer financial products through these platforms (‘Guidance Note’).

Part 2 of the Financial Markets Conduct Act 2013 (‘FMCA’) requires ‘fair dealing’ (which are broad principles that prohibit misleading or deceptive conduct, and false and misleading representations amongst others) in relation to financial products and financial services. These fair dealing requirements will apply to offers of financial products made through licensed crowdfunding and peer-to-peer platforms.

Accordingly, the FMA released this Guidance Note to ensure that licensed crowdfunding and peer-to-peer lending platforms understand their ‘fair dealing’ obligations when advertising or communicating with customers.

A copy of the Guidance Note is available here

The Guidance Note is relevant to licensed crowdfunding and peer-to-peer lending platforms

The Guidance Note is relevant to licensed crowdfunding and peer-to-peer lending platforms, and companies that offer financial products through such platforms. It will also be relevant for any other parties that engage with promoting or communicating licensed crowdfunding, or peer-to-peer products and services.

The Guidance Note sets out the FMA’s expected standard of advertising and communications

The Guidance Note focuses on the communications made to consumers for advertising financial products or services on licensed crowdfunding and peer-to-peer lending platforms. Some key points raised by the FMA include:

  • To carefully consider the dominant part of the communication as this will create the main message on which consumers may take action on. Therefore items like warnings, disclaimers and qualifications should be prominent enough.    
  • Comparisons between financial products and services should only be made if indeed the two products are adequately similar. Where advertising contrasts two different products or services, the differences should be clearly communicated.
  • Any statement that is made should be substantiated, i.e. a representation should be based on fact, rather than just based on an opinion. 

Start a conversation

If you would like a specific briefing on the Guidance Note please contact Chris Parke, David Lewis, Nick Scott, Catriona Grover or David Ireland or email the team at financialmarkets@kensingtonswan.com

 

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