The Broadcast Committee of Advertising Practice (BCAP), author of the UK Code of Broadcast Advertising (BCAP Code) are consulting on an amendment to their rule restricting ads for certain types of financial products to specialised financial channels, stations and programming.
The BCAP Code has long included a rule that restricts ads for certain types of complex financial products to specialised financial channels, stations and programming, meaning that such ads cannot be broadcast on mainstream TV or radio to a general audience. The restriction was put in place by the Independent Television Commission (ITC), the predecessor of Ofcom, because of concerns about the relative unsuitability of TV and radio as media for promotion of complex financial products, with their attendant risks for investors.
Wider review of the Code section has revealed a previously unidentified technical interpretation issue with the rule and its interaction with the wording of the background to the section, which has the unintended effect of banning TV ads for mass market financial products that would fall outside a layman’s understanding of an ‘investment’, on mainstream channels.
This consultation seeks to clarify that the restriction in rule 14.5.4 applies to unregulated products that would be regarded as investments, in a conventional sense. ‘Investment activity’ defined under the Financial Services and Markets Act (FSMA) includes services unlikely to be regarded by the public as investments, and therefore the Code as currently worded unintentionally restricts ads for products that do not conform with the type of high-risk investments the rule was intended to keep away from mass audiences.
The consultation will close at 5pm on Thursday 31 October 2024. For more information on how to respond, please see section 7.