Financial promotion

What it means

Financial promotion is a legal term in the UK. Section 21 of the Financial Services and Markets Act 2000 says a person must not, in the course of business, communicate an invitation or inducement to engage in investment activity — unless that person is authorised, or the content of the communication has been approved by an authorised person. A communication from outside the UK is caught if it is capable of having an effect in the UK¹. Breaching the restriction is a criminal offence, punishable on indictment by up to two years' imprisonment, a fine, or both².

The FCA's 2024 guidance applies the rule to social media. It is addressed to authorised firms and to unauthorised persons, including influencers and other affiliate marketers, who communicate financial promotions there, and it asks that promotions give a balanced view of the benefits and risks³.

Other countries regulate promotion under their own laws and their own terms, and the line may fall in a different place. The UK wording is a clear statement of the idea, not a rule that applies everywhere.

Example

Illustratively: a post explaining what a pip is informs. A post saying "open an account through my link this week and start trading" invites the reader to trade. The second is the kind of communication the UK restriction is written for, whatever platform carries it and wherever its author lives, if it is capable of having an effect in the UK.

Why it matters to an IB

An IB's partner link sits under almost every post, and the link is what can turn teaching into promotion. Know which countries your readers are in, check the rules there, and ask your broker's compliance team before you publish. What a page may claim is covered in evidence before claims.