By Sam Pearse
The UK Government has launched a Consultation regarding cryptoassets, focussing on whether unregulated cryptoassets should fall within the financial promotions regime, thereby affording protection for consumers. There is no immediate impact on cryptoasset businesses, but the regulatory landscape is changing.
The UK Financial Services and Markets Act 2000 sets out restrictions on the communication of invitations or inducements to engage in investment activity, such as investing in securities. In brief terms, only those persons who are authorised by the Financial Conduct Authority (FCA) may make such communications, or persons who are making a communication which as been authorised by an authorised person. Incidentally, the ‘approved communications’ exemption is also being reviewed by HM Treasury and our article about that can be found here.
At its core, the restriction on financial promotion is intended to protect consumers from being mis sold products, whether by virtue of being provided with insufficient information or by fraudulent activity or investing in immature or inadequate market infrastructures. Continue reading UK Government Consultation on the Promotion of Cryptoassets
By Natalie Stewart & Drew Salvest
HM Treasury has opened a consultation regarding a regulatory gateway for authorised firms approving the financial promotions of unauthorised firms. Responses to the consultation are sought by 25 October 2020 and the government is particularly interested in responses from authorised firms currently approving the promotions of unauthorised persons, retail consumers and unauthorised persons which communicate financial promotions. Unauthorised firms who rely on authorised persons to enable them to market products in the UK should consider approaching their usual approving firms to ensure any implementation of this consultation does not inhibit market access.
Financial promotions (“Promotions”) are restricted under Section 21 of the Financial Services and Markets Act 2000 (“FSMA”), pursuant to which a person must not, in the course of business, communicate an invitation or inducement to engage in investment activity unless the Promotion has been made or approved by an authorised person or it is exempt. Unauthorised firms often use authorised firms which are authorised to carry on a regulated financial services activity to approve their Promotions in order to comply with the regulations (the “Authorised Persons Approval Route”).
Authorised firms are not required to notify the Financial Conduct Authority (the “FCA”) once they have approved an unauthorised firm’s Promotion, nor does the FCA sign off on approved Promotions before they are communicated to consumers. As such, the FCA is only made aware of potential breaches of the relevant regulations. Continue reading HM Treasury Consultation on the regulatory framework for the approval of financial promotions
By Sam Pearse
As previously reported (see here), the UK Government launched the Future Fund on 20 May, with the intention of providing financial support to British start-ups. It has proved to be popular, with over £320m of convertible loans to 322 businesses having been approved.
One of the criteria for accessing the Future Fund was that the applicant had to be a UK-incorporated company or a group with a UK ultimate holding company. The UK Treasury has now elected to expand the programme to include certain overseas companies.
It is not uncommon for British start-up businesses to incorporate outside of the UK, or put a non-UK holding company in place, in order to be eligible for local funding programmes. For example, European businesses may incorporate in the US in order to be more attractive to investors in the US and being able to participate in US accelerator programmes. After all, the US seed and venture capital market has much deeper pockets than its European equivalents.
In order to address this, the British Business Bank has announced the expansion of the Future Fund in order to:
“accommodate businesses that contribute significantly to the UK economy, but do not have their parent company based in the UK because they participated in a non-UK based accelerator programme”.
Revised eligibility – overview
Continue reading COVID-19: Update To Future Fund Eligibility
By Nic Hart & Liam Hutton
The Flexible Furlough Scheme (FFS) commenced today July 1st 2020 and you can now submit claims for periods starting on or after 1 July.
GOV.UK published a news story this afternoon announcing this commencement.
As discussed in earlier mail outs the main premise of the FFS is to allow;
“businesses to bring furloughed employees back to work on a part time basis and will be given the flexibility to decide the hours and shift patterns of their employees – with the government continuing to pay 80% of salaries for the hours they do not work.”
The FFS will remain open until the end of October 2020. Continue reading COVID-19: UK Gov Flexible Furlough Scheme – 1 July 2020 Update