How Is Brexit Causing a Stir Between Brokers and Affiliates?

What is the FCA PS20/10 policy, and why you need to know about it?

As the UK left the EU, new financial regulations in the UK, as well as their implementation and enforcement policies, are changing on a daily basis. As part of those changes, firms carrying out marketing, distributing or selling of crypto assets and crypto CFDs to retail clients in or from the UK should have terminated these activities by 6 January 2021.

The newest policy, named FCA PS20/10 is an uncharted territory yet to be fully uncovered, and it is difficult to predict how the new policy will be addressed and practically enforced. Many brokers and affiliates in the financial space are already reevaluating their next moves in the business, looking for legal and banking solutions for the new situation.

As this topic continues to gain interest, Finance Magnates found time to have a conversation with international legal and banking experts, Tal Itzhak Ron and Emily Helmer from Tal Ron, Drihem & Co., Law Firm to shed some light on the unknown and provide some tips.


Tal Itzhak Ron, Tal Ron, Drihem & Co., Law Firm
Tal Itzhak Ron, Tal Ron, Drihem & Co., Law Firm

Q:           Tal, Emily, who is affected by the FCA PS20/10 policy?

A:            The FCA PS20/10 policy is particularly relevant for:

  • firms issuing or creating products referencing crypto assets
  • firms distributing products referencing crypto assets, including brokers and investment platforms
  • operators of trading venues and platforms

However you may note that this is not an exhaustive list, and the policy may apply to additional parties and service providers.

Q:           Tal, let’s say I’m an affiliate practitioner, bringing traffic to FX brokers on a CPA (cost per acquisition) model. Does this apply to me? 

A:            This is the main question that we have been discussing with many of our affiliate clients since the regulation was even proposed. They worried specifically about how the authorities define, “A firm marketing products referencing crypto assets.” Does it apply only to the actual campaign owners themselves (the brokers)? Or does it also apply to the firms that actually publish the crypto assets for sale and distribution (which can be the affiliate, either working directly with the broker or through an affiliate network)?

Our firm is closely monitoring the situation and already taking action with many of our clients – brokers, affiliates, and technology providers – to update their terms and conditions in order to cover those options.

Q:           Emily, what do we know for sure? 

A:            In the UK, marketing and distributing financial instruments and the provision of related services are governed by the UK financial promotion regime.

The addition of crypto assets to the list of financial instruments covered by the financial promotion regime will affect the ability of service providers to distribute crypto assets and market-related services in the UK.

Emily Helmer Tal Ron, Drihem & Co., Law Firm
Emily Helmer, Tal Ron, Drihem & Co., Law Firm

As before, all marketers (whether in the UK or targeting UK clients) are still subject to the CAP Code – The UK Code of Non-Broadcast Advertising and Direct & Promotional Marketing.

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We have been discussing two chapters of the code with our clients which are specifically relevant to the new policy post-Brexit.

Chapter 1: Compliance, specifies that under legality provisions, the marketer must not state or otherwise imply that a product can legally be sold if it cannot. In light of the new policy, crypto assets and CFDs are not to be legally sold to UK residents.

Chapter 14: Financial Products, specifies that marketers of these products (whilst the classification itself is inconclusive) will be subject to the FCA guidance when promoting financial products.

Q:           So, Emily and Tal, what options do I have now, if I’m active in marketing crypto assets and CFDs? 

A:            While the marketing of unregulated crypto assets to UK investors is curtailed due to ‘controlled investment’ and ‘controlled activity’, some clients have been successful in getting exemptions for marketing materials.

Under Financial Promotion Order 2005 (FPO), there is a way to have marketing material approved by an FCA-authorized entity before distribution, among other remedies.

Brokers, platforms and affiliates are working closely with our team to have their insertion orders and terms and conditions amended to adequately protect themselves by adding expansive compliance disclaimers and indemnifications clauses, with the goal of making sure that they are protected on one side, but still, work transparently and according to the applicable rules. Compliance is not only a challenge, but also an opportunity for maintaining a successful financial operation, and there are so many successful companies that can be a good example.

Q:           Tal, as a courtesy to our readers, without seeing it as legal advice – can you give an example for an update of such a legal agreement.

A:           Gladly. A clause we have added to the terms and conditions of one of the leading affiliate networks working in this space was as following:

“The Customer (the Broker) acknowledges that the Company (the Network) is solely acting as an intermediary party, thus, in no manner will the Company be responsible to confirm, monitor or approve compliance by the Customer or any Third Party Provider (the Affiliate) with any and all applicable laws and regulations. The Company is not a party to the transaction carried out by the Customer and its clients and/or the interaction between the Customer and the Third-Party Providers, and such shall be the exclusive responsibility of the Customer”.

Similarly, Brokers had changes in their agreements – both with partners and with traders – where we extended many of the clauses that deal with responsibility and indemnification.


Thank you very much, Tal Itzhak Ron and Emily Helmer from Tal Ron, Drihem & Co., Law Firm for the expert insights and I look forward to meeting you again soon.

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