Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has had discussions with the Financial Conduct Authority on the regulation of financial promotion content on social media linked to so-called pump-and-dump investment schemes; and what steps her Department is taking to protect consumers from misleading online investment advice.

The UK has a robust regime for identifying and tackling market abuse. It provides the FCA the ability to impose both criminal and regulatory sanctions against perpetrators of market manipulation and insider dealing.

The UK’s financial promotions regime is designed to ensure that consumers are provided with clear and accurate information that enables them to make appropriate decisions for their individual circumstances. As a technology-neutral framework, the regime holds financial promotions on social media to the same standards as those on any other channel. The Financial Conduct Authority (FCA) are responsible for enforcing against any financial promotions that are illegal or which do not comply with its rules.

The provision of financial advice is an FCA regulated activity and those who provide financial advice need to be authorised by the FCA and have the appropriate qualifications. The FCA can take action against firms or individuals who carry out regulated activity without authorisation. Earlier this year, the FCA led a global week of action against unlawful finfluencers resulting in 650 take down requests on social media platforms in the UK.

The government is committed to ensuring that all consumers can access regulated and high-quality sources of advice and support. That is why, together with the FCA, we are developing a new regime called targeted support. This will enable regulated financial services firms to provide more support to give people the confidence to invest.

The Money and Pensions Service (MaPS), an arm’s length body of the government, also provides comprehensive guidance to support consumers at every stage of their financial lives. Its MoneyHelper website offers information on a wide range of financial topics, including how to assess online and app-based investments, whether to trust investment recommendations on social media, and the risks of following unauthorised financial advice found online.