A Consultation on Facilitating Financial Promotions in the Workplace
Introduction
1.1 This consultation sets out the Government’s proposals to amend the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, in order to provide new exemptions from financial regulation for financial promotions made to employees by employers and, in some circumstances, by third party pensions administrators. These proposals form part of a ten point action plan of reforms to wholesale and retail financial markets set out in the 2005 Pre-Budget Report, which reflects a number of concerns raised by industry and consumers about financial services regulation.
1.2 As part of the Treasury’s Two-Year Review of the Financial Services and Markets Act 2000 (FSMA), employers were provided with a new exemption from the financial promotion regime, enabling them to issue written material and make oral promotions about their pensions to their employees without themselves needing to be authorised by the Financial Services Authority (FSA), and without needing these communications to be issued or approved by persons who have been authorised by the FSA.
1.3 Full details of these reforms were set out in the Treasury’s consultation feedback statement ‘Financial Services and Markets Act Two Year Review: Changes to Secondary Legislation – Government Response’, published on 2 December 2004.
These changes came into effect on 1 July 2005, when the new Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 came into force.
1.4 This 2004 consultation feedback statement noted that a number of respondents had suggested that this new exemption should apply to other investment and insurance products which are relevant to the workplace, such as employee share saver schemes, share incentive plans, health cover, income protection and life cover. The Treasury’s consultation feedback statement agreed that it may be worth widening the exemption to cover these areas in due course. This consultation relates to these industry suggestions.
1.5 One consultation respondent also suggested that the new exemption should be extended to cover promotions made by third party pensions administrators, as the administration of a number of company pension schemes is outsourced. In these cases the employer often uses staff from the outsourced company, which may not be authorised by the FSA, to provide information about the scheme. This consultation also covers this suggestion.
Chapter 1 Extending Employers Freedom – Introduction
Chapter 2 Responding to the Consultation
Chapter 3 FSMA Two-Year Review Exemption
Chapter 4 Pensions Promotions to Employees
Chapter 5 Promoting Insurance Products
Chapter 6 Employee Share Schemes and Plans
Chapter 7 Partial Regulatory Impact Assessment
Chapter 7A Options – Legislate or Not
Annex A Current Pensions Exemption
Annex B Current Insurance Exemptions
Annex C Proposed New Legislation
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