The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 Keeling Schedule

The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 (the “Order”) was published on 27 March 2023. The Order amends the Financial Services and Markets Act 2000 (FSMA) to extend the scope of the financial promotion restriction in section 21 of FSMA, by amending the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”). Specifically, the Order adds a definition of “qualifying cryptoasset” to the FPO, and makes consequential amendments to the FPO.

The Order is a significant development in the regulation of cryptoassets in the UK. It is the first time that the UK government has specifically regulated cryptoassets, and it is likely to have a significant impact on the cryptoasset industry.

What is the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023?

The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 is an order made by the UK government under the Financial Services and Markets Act 2000 (FSMA). The Order amends the FPO to extend the scope of the financial promotion restriction in section 21 of FSMA. Specifically, the Order adds a definition of “qualifying cryptoasset” to the FPO, and makes consequential amendments to the FPO.

What is the financial promotion restriction?

The financial promotion restriction is a provision in FSMA that prohibits the promotion of certain financial investments to retail consumers. The restriction is designed to protect retail consumers from the risks associated with financial investments.

What is a qualifying cryptoasset?

A qualifying cryptoasset is a cryptoasset that meets the following criteria:

• It is a transferable cryptoasset.

• It is capable of being used as a means of payment.

• It is not a fiat currency.

• It is not a security.

What are the consequences of the Order?

The Order has a number of consequences for the cryptoasset industry.

First, the Order makes it clear that the financial promotion restriction applies to cryptoassets. This means that firms that promote cryptoassets to retail consumers will need to comply with the financial promotion restriction.

Second, the Order provides a definition of “qualifying cryptoasset”. This will make it easier for firms to determine whether or not they are subject to the financial promotion restriction when promoting cryptoassets.

Third, the Order makes consequential amendments to the FPO. These amendments are designed to ensure that the financial promotion restriction is applied consistently to cryptoassets.

What does the Order mean for consumers?

The Order is likely to have a positive impact on consumers. By extending the scope of the financial promotion restriction, the Order will help to protect consumers from the risks associated with cryptoassets.

The Order is also likely to make it easier for consumers to make informed decisions about cryptoassets. By providing a definition of “qualifying cryptoasset”, the Order will make it easier for consumers to understand whether or not a particular cryptoasset is subject to the financial promotion restriction.

What does the Order mean for businesses?

The Order is likely to have a mixed impact on businesses. On the one hand, the Order will make it more difficult for businesses to promote cryptoassets to retail consumers. On the other hand, the Order will provide businesses with greater certainty about the scope of the financial promotion restriction.

Overall, the Order is likely to have a positive impact on the cryptoasset industry. By extending the scope of the financial promotion restriction, the Order will help to protect consumers from the risks associated with cryptoassets.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1145843/FSMA__FCA_powers__Keeling_Schedule_FINAL_22.03.23_.pdf