The Broadcast Committee of Advertising Practice (BCAP) is consulting on an amendment to its rules in the BCAP Code which restricts advertisements for certain types of financial products to specialised financial channels, stations and programming.

Rule 14.5.4 states:

“advertisements for investments not regulated or permitted under FSMA. An advertisement that implies, for example, that a collectors' item or other unregulated product or service could have investment potential (in the colloquial sense) would normally be unacceptable.”

This 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), Ofcom’s predecessor, because of concerns about the relative unsuitability of TV and radio as media for promotion of complex financial products, and risks for investors.

BCAP has been reviewing the Code and has discovered 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.

As a result, the 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 2000 includes services unlikely to be regarded by the public as investments.  Therefore, the current wording of the BCAP Code 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 issue was identified in the course of carrying out a wider internal review of the financial section of the BCAP Code, which included a proposal to introduce a new rule explicitly banning ads for qualifying cryptoassets from mainstream TV. Ultimately, the only product presently identified as being affected by the technical interpretation issue is unregulated buy-now-pay-later (BNPL) credit.

The consultation ends on 31 October 2024.