FCA Orders Freetrade to Pull Down ‘Misleading’ Social Media Promotions

Freetrade, the company offering commission-free stock trading services, has come under the scrutiny of the United Kingdom’s
 
 Financial Conduct Authority (FCA 
) for ‘misleading’ promotional campaigns on social media.

The supervisory agency has flagged multiple promotions of the platform for the violation of its Conduct of Business Sourcebook (COBS) rules that demands regulated financial services platforms to ‘fair, clear and not misleading’ promotions.

According to the latest supervisory notice issued this week, the FCA wants Freetrade to remove all sponsored advertisements and posts from all social media platforms. Further, the broker needs to conform to the regulator that it has complied by submitting a list of all advertisements and posts removed.

Freetrade is headquartered in London and offers commission-free trading services, much similar to the popular American platform, Robinhood. It is now focused on expanding services across Europe.

Non-Compliant Ads

The tussle between the FCA and Freetrade started in March 2020 when the regulator first expressed its concern regarding the social media promotions of the company. For instance, one of the landing pages did not include a mandatory capital risk warning.

The British regulator identified further Freetrade promotion violations and communicated with the firm about the
 
 regulation 
breaches a year after. However, the broker continued with its social media promotions.

“The further breaches of related financial promotion rules indicates to the Authority that the Firm did not adequately amend its approach to approving and issuing financial promotions when it conducted its internal reviews,” the latest supervisory notice noted.

“The previous breaches related to financial promotions originated and communicated by the Firm, and the Authority considers that the financial promotions communicated by paid for or sponsored influencers also breach the financial promotion rules.”

Meanwhile, the advertising regulator of the United Kingdom has put crypto promotions on the ‘red list’ and flagged the promotional campaigns of several firms, including one of football club Arsenal’s, for misleading advertisements.

Freetrade, the company offering commission-free stock trading services, has come under the scrutiny of the United Kingdom’s
 
 Financial Conduct Authority (FCA 
) for ‘misleading’ promotional campaigns on social media.

The supervisory agency has flagged multiple promotions of the platform for the violation of its Conduct of Business Sourcebook (COBS) rules that demands regulated financial services platforms to ‘fair, clear and not misleading’ promotions.

According to the latest supervisory notice issued this week, the FCA wants Freetrade to remove all sponsored advertisements and posts from all social media platforms. Further, the broker needs to conform to the regulator that it has complied by submitting a list of all advertisements and posts removed.

Freetrade is headquartered in London and offers commission-free trading services, much similar to the popular American platform, Robinhood. It is now focused on expanding services across Europe.

Non-Compliant Ads

The tussle between the FCA and Freetrade started in March 2020 when the regulator first expressed its concern regarding the social media promotions of the company. For instance, one of the landing pages did not include a mandatory capital risk warning.

The British regulator identified further Freetrade promotion violations and communicated with the firm about the
 
 regulation 
breaches a year after. However, the broker continued with its social media promotions.

“The further breaches of related financial promotion rules indicates to the Authority that the Firm did not adequately amend its approach to approving and issuing financial promotions when it conducted its internal reviews,” the latest supervisory notice noted.

“The previous breaches related to financial promotions originated and communicated by the Firm, and the Authority considers that the financial promotions communicated by paid for or sponsored influencers also breach the financial promotion rules.”

Meanwhile, the advertising regulator of the United Kingdom has put crypto promotions on the ‘red list’ and flagged the promotional campaigns of several firms, including one of football club Arsenal’s, for misleading advertisements.

Source: https://www.financemagnates.com/forex/brokers/fca-orders-freetrade-to-pull-down-misleading-social-media-promotions/