Consultation outcome

Financial promotion exemptions for high net worth individuals and sophisticated investors: a consultation

• From: HM Treasury
• Published: 15 December 2021
• Last updated: 7 November 2023 — See all updates

This was published under the 2019 to 2022 Johnson Conservative government

This consultation has concluded

Read the full outcome

Financial promotion exemptions for high net worth individuals and sophisticated investors: Consultation response

PDF, 299 KB, 32 pages

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Detail of outcome

This is the government’s response to the consultation which proposed reforms to the Financial Promotion Order exemptions for high net worth individuals and sophisticated investors. The consultation ran from 15 December 2021 to 9 March 2022.

After carefully considering all responses, the government intends to update the exemptions by:

• raising the financial thresholds to qualify for the exemptions to account for inflation
• tightening other eligibility criteria to reduce the risk of capturing ordinary consumers
• strengthening the statements that investors are required to complete when using the exemptions

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Original consultation

Summary

The government is consulting on proposals to amend the financial promotion exemptions for high net worth individuals and sophisticated investors.

This consultation ran from
9am on 15 December 2021 to 11:45pm on 9 March 2022

Consultation description

The Financial Promotions Order contains exemptions for high net worth individuals and sophisticated investors from the financial promotion restriction. These exemptions help small and medium sized enterprises raise finance from sophisticated private investors, or ‘business angels’ without the cost of having to comply with the financial promotions regime.

This consultation proposes reforms to these exemptions, responding to economic, social and technological changes that have occurred since the exemptions were introduced in 2001, and to instances of misuse of the exemptions identified by the Financial Conduct Authority.

The proposed reforms look to:

• Ensure that thresholds for exempt investors are calibrated to reflect investors’ experience or their ability to absorb losses

• Reduce the risk that the exemptions are used for promotions to investors who do not meet the conditions

• Ensure that, where exemptions are used, investors understand the regulatory protections they are losing and are able to take responsibility for their investment decisions

Documents

Financial promotion exemptions for high net worth individuals and sophisticated investors: Consultation

PDF, 524 KB, 41 pages

This file may not be suitable for users of assistive technology.

Request an accessible format.

If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email digital.communications@hmtreasury.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Published 15 December 2021
Last updated 7 November 2023 + show all updates

1. 7 November 2023

   Updated with consultation response.

2. 15 December 2021

   First published.