LONDON, Aug 1 Reuters Britain39;s financial watchdog finalised tougher rules on Monday for advertising high risk products, such as peertopeer loans and the minibonds sold by investment firm London Capital Finance LCF, whose collapse led to a government bailout of investors.

The Financial Conduct Authority FCA said firms approving and issuing marketing material must have appropriate expertise and conduct better checks for ensuring that customers understood the risks involved.

Firms also need to use clearer and more prominent risk warnings and certain incentives to invest, such as 39;refer a friend bonuses39;, are now banned, the FCA said in a statement, referring to giveaways for customers who introduce new clients.

The FCA wants to make it harder to sell high risk products, which also include other types of speculative illiquid securities, unlisted equity and debt, crowdfunding, and unregulated collective investment schemes.

This follows concerns that a significant number of people who invest in highrisk products do not view losing money as a risk of investing and invest without understanding the risks involved, the FCA said in a statement.

These investments came under the spotlight after LCF collapsed in 2019, leaving 11,600 investors in minibonds facing losses of up to 237 million pounds.

An independent report said the FCA had failed to supervise LCF properly, triggering a revamp to become a more assertive watchdog. Last week it said it would impose a tougher…