Certificate In Mortgage Advice And Practice (CeMAP) Module 3 Practice Exam

Which statement best reflects FCA's stance on approving financial promotions?

The FCA must approve every financial promotion. The FCA never approves financial promotions. Firms may use financial promotions without FCA approval. FCA approval is required only for mortgages.

Correct Answer:

Firms may use financial promotions without FCA approval.

Explanation:

The key idea is that the regulator does not pre‑approve every financial promotion. In the UK, a promotion about regulated products or services must be approved by the authorised person promoting it (or fall under an exemption), and it must be clear, fair and not misleading. The FCA’s job is to oversee compliance and enforcement, not to sign off each individual promo in advance. So, as long as the firm has the appropriate authorisation and signs off the material (and it meets the rules), promotions can be used without prior FCA approval. The other options misstate the process: the FCA doesn’t routinely pre‑approve all promotions, and the rule isn’t limited to mortgages.

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