We have gone above and beyond the requirements to protect consumers in respect of its service to approve financial promotions for cryptoasset firms. For example; we...
- require that our S21 clients explain steps customers can take to mitigate risks;
- prescribe training in respect of identifying and understanding the needs of vulnerable customers;
- provide a risk management framework, identifying the risks and training clients to assess and manage them
After 10 years of managing high-risk investments, our experience prepares us to help other high-risk investment firms.
Disappointingly, earlier today, the FCA used its Own Initiative powers obliging the firm to cease approving financial promotions (FP). In their First supervisory Notice, the FCA made reference to various Due Diligence expectations outlined in Guidance Consultation 23/1, but for which there is no corresponding policy statement. Upon questioning, the FCA explained that the relevant policy will be published in the Autumn of this year. In the absence of the policy, we feel that it's disproportionate to hold S21 approvers to account for a framework that does not yet exist.
Yesterday, the FCA announced that 146 firms were not compliant with the new FP requirements. Our view is that it should be looking to work with S21 approvers to get these firms compliant. We have hired additional resources into our team to bolster the competency and expertise in relation to cryptoassets.
The S21 gateway is open to applications from November 6th for firms looking to approve FPs on behalf of 3rd party companies. In the interim, regulated firms may approve FPs for 3rd party companies without additional permission/authorisation.
The firm has appealed both the OIREQ and the waiver rejection at the Upper Tribunal on grounds of proportionality and failure to follow due process.
