FCA censures EFG for minibond promotions that hid commission fees from investors
A public censure, an insolvent firm, and a clear message: if you approve financial promotions, you own what they say, and what they leave out.
Listen on Spotify
Verdict: Worth reviewing if your firm approves financial promotions, especially for appointed representatives or third-party introducers.
The FCA has publicly censured Equity for Growth (Securities) Limited (EFG) (FCA press release, 2026) for approving financial promotions relating to minibonds (unlisted short-term debt instruments) that were unfair, unclear and misleading. The core failure was straightforward: the promotions EFG approved did not disclose the very high commission fees charged by its appointed representatives and other introducers for marketing the bonds to investors, nor did they make clear that those fees would be deducted directly from investors' money. Investors were, in effect, making decisions without knowing how much of their capital would never reach the underlying investment.
EFG is no longer a going concern. On 25 March 2026, the High Court wound the firm up on grounds of insolvency, following an FCA petition and restrictions that had already barred it from conducting regulated activities. The FCA has waived what would have been a £386,467 financial penalty on the basis that imposing it would reduce the funds available to creditors. Investor claims against EFG will now be assessed by the Financial Services Compensation Scheme (FSCS).
For firms that approve promotions, whether for appointed representatives or unconnected third parties, approving a promotion is not a rubber stamp. It is an endorsement of everything the promotion says and, critically, everything it omits. The FCA's enforcement director put it plainly: investors cannot make informed decisions without key information. A fee that eats into investors' capital is not a disclosure footnote; it belongs prominently in the promotion itself.
If your firm approves promotions for appointed representatives or introducers who earn commission on sales, this notice is a direct signal about what the FCA expects to see disclosed, and where.
