Part 1: Regulatory Framework Regulatory gateway for financial promotions Section 20: Financial promotion
This section amends FSMA 2000 to establish the regulatory gateway, which authorised firms must pass through before being able to approve the financial promotions of unauthorised firms. Any authorised firm wishing to approve the financial promotions of unauthorised firms will first need to obtain permission to do so from the FCA or otherwise do so within the scope of an exemption to the regulatory gateway.
	Subsection (1) is self-explanatory.
	Subsection (2) relates to the insertion of the new subsection 2A into section 21 of FSMA 2000. This removes a general permission that allows authorised firms to approve the content of financial promotions. By this new subsection, an authorised firm can only approve a financial promotion if it is either permitted to do so having gone through the regulatory gateway under the new section 55NA of FSMA 2000, or an applicable exemption applies under the new section 55NB of FSMA 2000.
	Subsection (3) sets out the substance of the new financial promotion regulatory gateway and inserts the new section 55NA and the new section 55NB into FSMA 2000.
	Subsection (3) (inserting section 55NA(1) of FSMA 2000) imposes a new requirement on all authorised firms to have permission from the FCA under the regulatory gateway before approving financial promotions, unless exempt from this requirement.
	Subsection (3) (inserting section 55NA(2) of FSMA 2000) provides that authorised firms that approve financial promotions for the purpose of section 21 of FSMA 2000, without FCA permission under the regulatory gateway, will be doing so in breach of a requirement imposed by the FCA under FSMA 2000.
	Subsection (3) (inserting section 55NA(3) of FSMA 2000) provides that both an authorised firm, or an applicant for authorisation, may apply for and be granted permission under the regulatory gateway.
	Subsection (3) (inserting section 55NA(4) to (6) of FSMA 2000) details the FCA’s powers to grant, vary or cancel a permission to approve financial promotions under the regulatory gateway. The FCA is able to grant the firm permission in line with the terms sought in its application, but it can also make the permission subject to other, potentially narrower, terms if it considers that appropriate. The FCA is also able to vary or cancel an existing permission, either on its own initiative or following an application made by the firm that was granted the permission. Where a permission is either granted or varied, the FCA must set out the terms on which it has been granted or varied.
	Subsection (3) (inserting section 55NA(7) of FSMA 2000) provides that the FCA may refuse an application for a new regulatory gateway permission, or a variation or cancellation of an existing permission, if the FCA believes that such a decision would advance one or more of its operational objectives of consumer protection, integrity and competition under section 1B(3) of FSMA 2000.
	Subsection (3) (inserting section 55NA(8) of FSMA 2000) details the grounds on which the FCA may vary or cancel an authorised firm’s existing permission, on its own initiative. These arise if it appears to the FCA that the firm has not approved or refused to approve any promotions of unauthorised firms in at least 12 months, or if doing so would advance one or more of its operational objectives.
	Subsection (3) (inserting section 55NA(9)(a) of FSMA 2000) imposes a requirement on the FCA to consult the PRA before granting, varying or cancelling a permission under the gateway given to a firm that is, or will be, a PRA-authorised firm or to a firm that is part of a group that includes a PRA-authorised firm.
	Subsection (3) (inserting section 55NA(9)(b) to (10) of FSMA 2000) requires the FCA to consult the Gibraltar regulator before granting, varying or cancelling a permission given to a Gibraltar-based firm. The exception is if the FCA varies or cancels a gateway permission on its own initiative, in which case the FCA must only inform the Gibraltar regulator of its decision.
	Subsection (3) (inserting section 55NA(11) of FSMA 2000) provides that the requirement for authorised firms to obtain FCA permission under the regulatory gateway will not apply if an exemption under the new section 55NB applies.
	Subsection (3) (inserting section 55NA(12) of FSMA 2000) provides that, where appropriate, the FCA is able to draw on other powers in FSMA 2000 to impose further requirements on an authorised firm’s ability to approve a financial promotion, beyond what is provided for in the new section 55NA(1) of FSMA 2000. It also clarifies that, where any additional requirement is inconsistent with the new section 55NA(1) of FSMA 2000, then that requirement would be of no effect to the extent of the inconsistency.
	Subsection (3) (inserting section 55NB(1) to (3) of FSMA 2000) confers a power on HM Treasury to create exemptions to the regulatory gateway in respect of certain firms, activities, circumstances and under certain conditions.
	Subsection (4) is self-explanatory.
	Subsection (5) confirms that the amendments under this section and Schedule 5 apply to firms authorised either before or after they come into force and that it does not affect financial promotions that were approved before this measure comes into force.