The Financial Conduct Authority has proposed new measures to clamp down on illegal, unfair or misleading financial marketing.

As a result, the regulator has outlined new checks for firms which want to approve financial promotions.

The new measures will require firms to demonstrate they have the right expertise for the promotions they wish to approve.

Under current legislation, any FCA-authorised firm is allowed to approve financial promotions on behalf of other firms which are not authorised by the regulator.

Changes being introduced by parliament will require authorised firms to undergo new screening checks before they are allowed to approve financial promotions.

The aim is to give the FCA greater oversight to stop harm before it occurs.

Firms will also be required to regularly report back to the FCA on financial promotions they have approved. This is to help the regulator to crack down on rogue adverts.

The proposed reforms aim to ensure the FCA can act quickly to put a stop to harmful financial promotions communicated by unauthorised firms.

That includes areas such as high-risk investments and Buy Now Pay Later.

FCA executive director Sarah Pritchard says: “Social media and online advertising means that consumers are taking less time between seeing a promotion and making a financial decision.

“It is, therefore, essential that they are equipped with the right information at the right time so that they can make good financial decisions. This is especially important as we face the rising cost of living.

“These proposals will ensure those approving ads have the appropriate expertise and are held accountable for the promotions they sign off.”

Those proposed new rules build on the FCA’s work on strengthening rules around advertising for high-risk investments and being more assertive in removing misleading adverts.

Between January and October this year, the FCA has removed or amended over 5,000 financial promotions from authorised firms. It compares to 564 in 2021.

The government is also looking to tackle online harms with the Online Safety Bill.

The bill aims to allow the Office of Communications (Ofcom) to regulate online platforms, with the introduction of fines for digital companies if they do not follow the overhauled online advertising regulations.

The Online Safety Bill was postponed this summer after Boris Johnson’s resignation.