Financial Services and Markets Act 2023: Financial promotions and cryptoassets

The Financial Services and Markets Act 2023 (FSMA 2023) has recently come into force, having received Royal Assent on 29 June 2023. It's a significant piece of legislation which will introduce some fundamental changes to UK’s post-Brexit and regulatory landscape.

One important area of change is the restriction on the making of ‘financial promotions’ in the UK.

A financial promotion is any invitation or inducement to engage in investment activity, which includes dealing in, arranging deals in or advising on deals relating to certain investments. Promotions made on websites, apps, social media and online advertising qualify, as well as, for example, posters and advertisements on public transport.

Firms are restricted from undertaking marketing and communications in relation to investment activities unless:

  • the relevant firm is authorised by the Financial Conduct Authority (FCA) (an authorised person)
  • the relevant communication has been approved by an authorised person
  • or, the relevant marketing or communications activity falls within an exemption to the Financial Promotion (Order) 2005 (FPO).

Regulatory gateway for approval of financial promotions

One of the key changes made is the introduction of a new regulatory gateway that authorised firms must pass through before being able to approve financial promotions of unauthorised firms. Any authorised firm wishing to approve the financial promotions of unauthorised firms will first need to obtain permission to do so from the FCA or otherwise do so within the scope of an exemption to the regulatory gateway.

Those wishing to undertake approval of financial promotions will need to submit through Connect a variation of permission (VOP) to have the relevant restriction either:

  1. varied
  2. cancelled

There are, however, a number of exclusions which may apply, depending on the connection between the approver and the unauthorised person. These include:

  • approving financial promotions of an unauthorised person within their own corporate group
  • approving their own financial promotions for communication by an unauthorised person
  • approving financial promotions of their appointed representatives in relation to regulated activities for which the principal has agreed to take responsibility

The FCA has confirmed there will be an application and transitional period to mitigate any disruption.  The length of the application period is, however, yet to be determined. Following this, during the transitional period, authorised firms will be able to continue to approve financial promotions and the FCA will determine the outcome for the applications made.  

Promotion of cryptoassets

The regime for financial promotions has also been expanded to cover a new category of financial instruments – ‘qualifying cryptoassets’. 

These are ‘any cryptographically secured digital representation of value or contractual rights that - 

  1. can be transferred, stored or traded electronically; and
  2. uses technology supporting the recording or storage of data (which may include distributed ledger technology)’ but which must also be fungible, transferable, and not expressly excluded.

If an asset falls within the definition of ‘qualifying crytoassets’, promotion of such investment may only be communicated under an exemption, or following approval of the promotion by an authorised person.

Our content explained

Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R


Register for My M&R to stay up-to-date with legal news and events, create brochures and bookmark pages.

Existing clients

Log in to your client extranet for free matter information, know-how and documents.


Mills & Reeve system for employees.