The new checks will require firms to demonstrate they have the right expertise for the promotions they plan to approve.

The changes are to be introduced by Parliament, following an FCA consultation.

Under current rules any FCA regulated firm is allowed to approve financial promotions on behalf of non-authorised firms.

The new rules will require authorised firms to undergo a new set of screening checks before they are allowed to approve financial promotions.

Firms will also be required to regularly report to the regulator on the financial promotions they have approved.

The FCA said the new checks will give it greater oversight to stop harm before it occurs, enabling it to act quickly to put a stop to harmful financial promotions.

There has been growing concern that some high risk financial promotions have been given legitimacy by receiving approval from regulated firms, convincing unsuspecting consumers that the investments are somehow 'safe' or 'guaranteed' in some way. Some promotions have also falsely claimed that FSCS protection is offered or made other false claims.

Sarah Pritchard, executive director of markets at the FCA, said the new rules will make firms more accountable.

She said: “Social media and online advertising means that consumers are taking less time between seeing a promotion and making a financial decision. It is, therefore, essential that they are equipped with the right information at the right time so that they can make good financial decisions. This is especially important as we face the rising cost of living.

“These proposals will ensure those approving ads have the appropriate expertise and are held accountable for the promotions they sign off.”

Between January and October the FCA removed or amended over 5,000 financial promotions from authorised firms, compared to 564 in 2021.

The changes will be introduced as part of the Financial Services and Markets Bill which proposes to amend the Financial Services and Markets Act 2000.

Laura Suter, head of personal finance at AJ Bell, said: “The regulator is turning up the heat on influencers touting investment schemes, crypto platforms or other trading schemes. The FCA is aiming to make it harder for adverts and promotions to be approved, in a bid to stop people handing over their cash for investment schemes based on inaccurate social media posts."