Global Glosssary: Includes FCA Definitions & Handbook references

Scammer requests an upfront payment, promising a future service or huge return on investment.

Scammer targets members of an identifiable group (e.g., cultural, religious, or ethnic community) and curries favor with them to rope them into a fraudulent investment opportunity.

Approver permission  a permission given by the FCA following determination of a firm’s application under section 55NA of the Act, which entitles that firm to approve certain financial promotions for the purposes of section 21 of the Act, whether generally or subject to terms set by the FCA.

Approver permission exemption an exemption from the approver permission requirement, provided under the Financial Promotion Requirement Exemption Regulations, which enables a firm to approve a financial promotion in prescribed circumstances without the need for approver permission.

Approver permission requirement the general requirement imposed on a firm by section 55NA(1) of the Act not to approve (or purport to approve) the content of a financial promotion for the purposes of section 21 of the Act without approver permission.

Scam by a third party requiring a fee to “recover” funds lost in a prior fraudulent transaction.

A scam to mislead buyers, whereby a seller advertises an appealing but ingenuine offer to sell a financial product or service that the seller does not actually intend to sell. Instead, the seller offers a sub-par, defective, or unwanted product or service. For crypto, this might be most relevant to non-fungible tokens.

A type of distributed ledger which records transaction information in ‘blocks’, distributed amongst a network of nodes that work together to reach consensus on updates to the shared ledger, creating an auditable ‘chain’ of transactions.

Sending cryptoassets to a wallet that has no access key, for the purpose of taking them permanently out of circulation.

Certified high net worth investor - a person who meets the requirements set out in article 21 of the Promotion of Collective Investment Schemes Order, in article 48 of the Financial Promotion Order or in COBS 4.12B.38R.

Certified sophisticated investor - a person who meets the requirements set out in article 23 of the Promotion of Collective Investment Schemes Order, in article 50 of the Financial Promotion Order or in COBS 4.12B.39R.

Financial promotion

A financial promotion communicated, or approved or in relation to which the firm has confirmed compliance(subject to exemptions). 

Financial promotion: competence and expertise

Evidence of how the firm has satisfied the competence and expertise requirement in COBS 4.10.9AR

Compliance of financial promotions

Firms encouraged to consider recording why a financial promotion is considered compliant.

Non-mass market investments: certification of compliance

Certification by the person allocated the compliance oversight function or employees of the firm reporting to and supervised by that person confirming that the financial promotion is compliant with the restrictions in section 238 of the Act and COBS 4.12B, as applicable. Which exemption applies and the reason why that exemption applies. Where the exemption requires a certificate, investor statement, warning or indication, a copy of that certificate, investment statement, warning or indication.

Restricted mass market investments: consumer journey

Records of the outcomes of the firm’s categorisation (COBS 4.12A.21R) of retail clients and in relation to appropriateness assessments undertaken (COBS 4.12A.28R)

Protection language

Basis for omitting reference to investors being unlikely to be protected in risk warning

Any change to the rules specifying the form and content of the investor statements in COBS 4 Annex 2R to COBS 4 Annex 5R does not affect the continuing validity of a statement complying with the relevant rule in force at the time that it was completed and signed.

Risk summaries

Grounds for using an alternative form of risk summary

The reasonable steps defence to an action for damages

(e) arranging (bringing about) deals in investments (paragraph 4(1));

(f) making arrangements with a view to transactions in investments (paragraph 4(2));

(g) managing investments (paragraph 5);

(i) advising on investments (except P2P agreements) (paragraph 7(1));

A messaging protocol that enables interoperability between blockchains by holding or storing cryptoassets and creating token representations of the same value on another blockchain, allowing for cross-chain transactions.

Scammer sends emails or physical mails to victims saying they have personal information about the victim or embarrassing or compromising photos or videos. They scammer then threatens to make these things personal information public unless the victim pays them in cryptocurrency.

A period in which a stablecoin loses its value relative to the underlying asset. During this period, the stablecoin will usually be traded at a discount on the secondary market.

DeFi is a segment of the crypto ecosystem, which utilises blockchain networks and smart contract technology to provide a range of financial service activities without an intermediary.