Do you need to review financial promotions for CONC compliance? This article provides guidance and information on who CONC applies to and how to review your promotions to comply with CONC 3.
What is the Consumer Credit Sourcebook?
The Consumer Credit Sourcebook (CONC) is listed under the ‘specialist sourcebook’ section of the FCA handbook. It sets out the rules and requirements for firms who carry out credit-related regulated activities. The CONC rules must be read in conjunction with the sections of the FCA handbook that apply to all regulated firms. Company obligations under CONC build upon the high-level standards such as PRIN, COND and SYSC.
“Financial promotions must be clear, fair and not misleading”.
The CONC 3 rules and guidance on financial promotions apply to specific consumer credit regulated firms. CONC 3 applies to a communication and/or approval for communication of a financial promotion: –
- with a customer in relation to a credit agreement.
- with a customer in relation to credit broking.
- with a borrower or a prospective borrower in relation to operating an electronic system in relation to lending.
- with a customer in relation to debt counselling or debt adjusting (CONC 3.3.1, 3.3.2 & 3.9).
- with a customer in relation to a consumer hire agreement (CONC 3.3.1).
- with a customer in relation to providing credit information services (CONC 3.3.1).
What is a Financial Promotion?
A financial promotion is any communication that contains an invitation or inducement to engage in a financial product or service. To comply with the FCA rules, all such promotional materials and content must be jargon free, non-misleading and accurate.
The purpose of the promotion should be to inform the consumer and to present them with the positive and negative aspects of any product/service. They should be able to easily see, read and understand the relevant facts and figures, allowing them to make an informed decision. A financial promotion must be identifiable as such and provide the mandatory information in a clear, fair and prominent format.
Define Policy Objectives for CONC 3 Compliance
The besy way to ensure your financial promotions comply with the CONC rules is to set out your objectives in your Financial Promotion Policy template. Your policy objectives should inform people of what your company intends to do to comply with specific rules and regulations.
The exact objectives and obligations around financial promotions compliance will depend on the business type, regulated activites and industry the firm operates in. However, there are some generic objectives that apply to all regulated firms.
You can set your objectives by reviewing the mandatory rules under CONC 3 and COBS 4 and ensuring you understand what financial promotions obligations your company has.
Sample Financial Promotion Policy Objectives
- All financial promotions and client communications are reviewed to ensure they are clear, fair and not misleading.
- All promotions use plain, intelligible language with content that is easily legible (and where applicable, clearly audible).
- The financial promotion specifies the name of the person/entity making the communication or who the communication is being sent on behalf of.
- Content is always accurate and gives a fair indication of any risks, which are evenly balanced against any potential benefits.
- Warnings, risks and/or disclosure statements are displayed in a prominent place and are easy to see, read and understand.
- The content, medium and format does not disguise, diminish or obscure important items, statements or warnings.
- Font size is always indicative of the relevant risks and is at least equal to the predominant font size used throughout the promotion.
Financial Promotions Policy & Template Pack
If you are looking for professional, high quality financial promotions policies and procedures….look no further! There is no need to start from scratch when you can join more than 9500 firms already using our regulatory compliance templates. Our Financial Promotion Policy is fully customisable and provides 27-pages of compliant, relevant content to meet the financial promotions and client communications rules.
Where you are approving or communicating financial promotions, you have an obligation to ensure they are fair, clear and not misleading. The templates in this pack help you to define your objectives, comply with your obligations and approve your financial promotions.
What are the Benefits of the Template Pack?
- 27-Page Financial Promotion Policy
- Excel Financial Promotion & Distance Marketing Checklists
- 15-Page Financial Promotion Approval Assessment Template
- Fully Customisable & Easy to Use
- Instant Download After Payment
- Templates Used by 9500+ Firms
- Essential policies and procedures for firms with CONC 3, COBS 4, ICOBS 2.2, MCOB 3A, BCOBS 2, CMCOB 3 and FCOB 4 obligations.
- 100+ checklist assessment questions for gap analysis on financial promotions, approver permission, client communication and distance marketing obligations.
- Professional, compliant 27-page Financial Promotion Policy Template covering the mandatory rules and requirements.
- Includes the new ‘Approver Permission’ requirements.
Consumer Duty & Financial Promotions
In addition to the standards COBS 4 requirements, firms with obligations under The Consumer Duty have additional financial promotions responsibilities. PRIN 2A requires firms to ensure their communications are suitable for the target audience as well as being clear, fair, and not misleading. We have therefore included all financial promotion templates in our Consumer Duty Template Toolkit.