The FCA has confirmed proposals to permanently ban the mass-marketing of speculative illiquid securities – including speculative mini-bonds – to retail investors.
A temporary ban was introduced without consultation in January following serious concerns that speculative mini-bonds were being promoted to retail investors who neither understood the risks involved, nor could afford the potential financial losses.

The new rules will apply from 1 January 2021 and include a small number of changes to the temporary ban, following a consultation launched in June.

This includes bringing listed bonds with similar features to other speculative illiquid securities, and which are not regularly traded, within the scope of the ban.

Sheldon Mills, Interim Executive Director of Strategy and Competition at the FCA, said:

‘We’ve today confirmed our proposals to make the speculative mini-bond ban permanent and extend its scope.

‘These products are high risk and are often designed to be hard to understand.

‘Consumers should always be wary of any investment promising high returns while downplaying risks.’

Protecting consumers from harm in the investment market was identified as a priority in the FCA’s 2020/21 Business Plan.

As part of that work, the FCA is currently reviewing feedback to its Call for Input on how the consumer investments market can be improved.

The FCA has also made clear that online platforms, such as Google, play an increasingly significant role in communicating financial promotions to consumers.

These firms need to do more to stamp out fraud and misleading adverts and bear clear legal liability for the financial promotions they highlight.