Financial Promotion Of High-Risk Investments

Question 1

What was the main motivation for FCA to introduce rules and regulations around financial promotion of high-risk investments?

Answer 1

There were an increasing number of retail clients who were investing in high-risk investments, but these were not always aligned with their risk tolerance

Question 2

What are Readily Realisable Securities (RRS)?

Answer 2

1. Listed or exchange traded securities.
2. These include things like shares or bonds traded on the London Stock Exchange
3. They have no marketing restrictions.

Question 3

What are Restricted Mass Market Investments (RMMI)?

Answer 3

1. These are Non-Readily Realised Securities (NRRS)
2. These include shares or bonds in a company that are not listed on an exchange.
3. Mass marketing is allowed to retail investors subject to certain restrictions.

Question 4

What are Non-Mass Market Investments (NMMI)?

Answer 4

1. These are Non-Mainstream Pooled Investments (NMPI)
2. These are pooled investments in an unauthorised fund.
3. Mass marketing is banned to retail investors.