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FinCom Bench

Sourcebooks / Financial promotion

Financial promotion

United Kingdom

UK — Financial promotion

Source: FCA Handbook, COBS (Conduct of Business Sourcebook) chapter 4.

COBS 4.2.1R

Verbatim clause withheld — the publishing authority's reuse terms do not confirm a right to redistribute the exact text (see sourcebooks/NOTICE-SOURCEBOOKS.md). See the URL above for the original, and "What this means" below for Doshi's own paraphrase.

What this means. Every marketing message and financial promotion a firm sends must be fair, clear, and not misleading. The firm must adjust this to the client — for example, a promotion to a professional investor can differ from one sent to a retail client. "Fair, clear and not misleading" is the FCA's single most-cited financial promotion standard — nearly every other financial-promotion rule in the Handbook, including COBS 4.2.4G below, is a worked example of this one principle.

COBS 4.2.4G

Verbatim clause withheld — the publishing authority's reuse terms do not confirm a right to redistribute the exact text (see sourcebooks/NOTICE-SOURCEBOOKS.md). See the URL above for the original, and "What this means" below for Doshi's own paraphrase.

What this means. The FCA lists concrete ways firms meet the fair-clear-not-misleading rule. A promotion for a product that risks the client's capital must say so plainly. A quoted yield must show both short-term and long-term prospects, not just the flattering number. A complex charge structure needs enough detail for the client to judge it fairly. This is guidance (the "G" in 4.2.4G), not a binding rule — a firm that finds another way to satisfy 4.2.1R's fair-clear-not-misleading standard is not automatically in breach for departing from these examples, but a firm that ignores them carries the burden of showing its alternative approach still works.

European Union

EU — Financial promotion

Source: MiFID II Delegated Regulation (EU) 2017/565 and Regulation (EU) 2019/1156 on cross-border distribution of funds.

Note: fetched via legislation.gov.uk's EU-retained-law mirror, not eur-lex.europa.eu directly (eur-lex returned empty content on every attempt). See sourcebooks/suitability/eu.md for the full caveat.

Delegated Regulation (EU) 2017/565 art. 44(1)–(2)(a)

Investment firms shall ensure that all information they address to, or disseminate in such a way that it is likely to be received by, retail or professional clients or potential retail or professional clients, including marketing communications, satisfies the conditions laid down in paragraphs 2 to 8. Investment firm shall ensure that the information referred to in paragraph 1 complies with the following conditions: (a) the information includes the name of the investment firm.

What this means. Every piece of information a firm sends to a client, including marketing, must meet a set list of fairness conditions. One fixed condition: the material must always name the firm that sent it. The rule reaches further than a firm's own outbound marketing — it also covers information the firm "disseminates in such a way that it is likely to be received by" clients, which can include third-party channels the firm uses or sponsors.

Regulation (EU) 2019/1156 art. 4(1)

AIFMs, EuVECA managers, EuSEF managers and UCITS management companies shall ensure that all marketing communications addressed to investors are identifiable as such and describe the risks and rewards of purchasing units or shares of an AIF or units of a UCITS in an equally prominent manner, and that all information included in marketing communications is fair, clear and not misleading.

What this means. Fund marketing material must be clearly labelled as marketing. It must show risks and rewards with equal visual weight, and every claim in it must be fair, clear, and not misleading. This regulation exists because fund marketing crosses borders inside the EU more easily than fund registration does — it sets one shared minimum standard so a fund manager cannot pick the most permissive member state's marketing rules just by routing the campaign through it.

United States

US — Financial promotion

Source: SEC Marketing Rule, 17 CFR 275.206(4)-1. Verified word for word against a second, independent fetch of the same Cornell Law page on 2026-08-12.

17 CFR 275.206(4)-1(a)(1)

It shall be unlawful for any investment adviser to disseminate any advertisement that includes any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it was made, not misleading.

What this means. An adviser's ad must not contain a false material fact. It must not leave out a fact that is needed to stop the ad from misleading the reader. The omission half of this rule is the one that catches the most real cases: an ad with 0 false statements can still violate it by leaving out the one fact — a fee, a conflict, a limitation — that would have changed how a reasonable reader understood the rest of the ad.

17 CFR 275.206(4)-1(e)(1)(i)

Advertisement means: (i) Any direct or indirect communication an investment adviser makes to more than one person, or to one or more persons if the communication includes hypothetical performance, that offers the investment adviser's investment advisory services with regard to securities to prospective clients or investors in a private fund advised by the investment adviser, or offers new investment advisory services with regard to securities to current clients or investors in a private fund advised by the investment adviser.

What this means. A message counts as a regulated ad if it offers advisory services to more than 1 person, or offers a new service to a current client. The rule then applies to that message. The "more than one person" threshold is deliberately low — a single group email to 2 prospective clients meets it, so an adviser cannot rely on a small distribution list to escape the rule.

Australia

Australia — Financial promotion

Source: ASIC RG 234 (advertising financial products and services), June 2026 edition — this superseded the November 2012 edition.

RG 234.16–17

Advertisements should give balanced information so that consumers can understand the nature of the product or service being advertised... Advertisements for financial products and credit products should give a balanced message about the returns, features, benefits and risks associated with the product... Advertisements should not overstate the potential benefits (e.g. investment returns) or create unrealistic expectations by giving undue prominence to the benefits compared with the risks or limitations.

What this means. An advertisement for a financial product must show benefits and risks together, in balance. The advertisement must not make returns look bigger, or risks look smaller, than they are. "Balance" is about relative prominence, not just presence — an ad that lists a risk once in fine print while repeating a return figure 3 times in bold has technically disclosed the risk but has not balanced it, and RG 234.34–35 below addresses that specific gap.

RG 234.34–35

The more that a qualification is required to balance the information contained in the headline claim, the more prominently placed the qualification should be. The headline claim must not itself be misleading... If warnings, disclaimers and qualifications are required, they should not be inconsistent with other content in the advertisement, including any headline claims.

What this means. Any warning needed to correct a misleading headline claim must be as visible as the headline. A warning in small print, or hidden behind a link, does not count. The test scales with the size of the gap: the bigger the headline claim overstates the product, the more prominent the qualifying warning has to be — a small caveat can fix a mild overstatement, but a large one needs an equally large correction.