Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will amend the Financial Promotions Order to remove the exemption for self-certified sophisticated investors.

The financial promotion regime includes a number of targeted exemptions that are designed to reduce regulatory burdens, including for small and medium-sized enterprises (SMEs) seeking to raise capital through sophisticated private investors.

The previous government brought forward proposals to amend the exemptions for self-certified sophisticated investors and high-net-worth individuals, which came into effect in January 2024. Those reforms aimed to strike a balance between increasing consumer protection and preserving the ability of SMEs to raise capital.

However, following significant concerns having been raised about the impact of these changes on SMEs raising capital, the previous Chancellor announced at Spring Budget 2024 that the government would legislate to reinstate the previous eligibility criteria. Those changes came into effect on 27 March 2024.

The Government has no plans to remove the exemption for self-certified sophisticated investors.