The trading platform is running promotional campaigns across social media platforms.
It has been ordered to remove all promotional campaigns on social media.
The supervisory agency has flagged multiple promotional campaigns of the platform for violation of its Conduct of Business Sourcebook (COBS) rules that demands regulated financial services to ‘fair, clear and not misleading’ promotional campaigns.
According to the latest supervisory notice issued this week, the FCA wants Freetrade to remove all sponsored advertisements and posts from all social media platforms. Further, the broker needs to conform to the regulator that it has complied by submitting a list of all advertisements and posts removed.
Freetrade is headquartered in London and offers commission-free trading services, which is very similar to the popular American platform, Robinhood. It is now focused on expanding services across Europe.
Non-Compliant Ads
The tussle between the FCA and Freetrade started in March 2020 when the regulator first expressed its concern regarding the social media promotions of the company. For instance, one of the landing pages did not include a mandatory capital risk warning.
Moreover, the British regulator identified Freetrade promotion violations and communicated with the firm about the regulation breaches a year after. However, the broker continued with its social media campaigns.
“The further breaches of related financial promotion rules indicate to the Authority that the Firm did not adequately amend its approach to approving and issuing financial promotions when it conducted its internal reviews,” the latest supervisory notice revealed.
“The previous breaches related to financial promotions originated and communicated by the Firm, and the Authority considers that the financial promotions communicated by paid for or sponsored influencers also breach the financial promotion rules.”
Meanwhile, the advertising regulator of the United Kingdom has put crypto promotions on the ‘red list’ and flagged the promotional campaigns of several firms, including a famous football club, Arsenal, for misleading advertisements.
