text:
PART I
Citation, Commencement and Interpretation
Citation and commencement
1
This Order may be cited as the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and comes into force on 1st July 2005.
Interpretation: general
2
1
In this Order, except where the context otherwise requires —
“the 1985 Act ” means the Companies Act 1985 ;
“the 1986 Order ” means the Companies (Northern Ireland) Order 1986 ;
“ the Act ” means the Financial Services and Markets Act 2000;
“close relative” in relation to a person means —
his spouse;
his children and step-children, his parents and step-parents, his brothers and sisters and his step-brothers and step-sisters; and
the spouse of any person within sub-paragraph (b);
“controlled activity” has the meaning given by article 4 and Schedule 1;
“controlled investment” has the meaning given by article 4 and Schedule 1;
“deposit” means a sum of money which is a deposit for the purposes of article 5 of the Regulated Activities Order ;
“equity share capital” has the meaning given in the 1985 Act or in the 1986 Order;
“financial promotion restriction” has the meaning given by article 5;
“government” means the government of the United Kingdom, the Scottish Administration, the Executive Committee of the Northern Ireland Assembly, the National Assembly for Wales and any government of any country or territory outside the United Kingdom;
“instrument” includes any record whether or not in the form of a document;
“international organisation” means any body the members of which comprise —
states including the United Kingdom or another EEA State; or
bodies whose members comprise states including the United Kingdom or another EEA State;
“overseas communicator” has the meaning given by article 30;
“previously overseas customer” has the meaning given by article 31;
“publication” means —
a newspaper, journal, magazine or other periodical publication;
a web site or similar system for the electronic display of information;
any programme forming part of a service consisting of the broadcast or transmission of television or radio programmes;
any teletext service, that — is to say a service consisting of television transmissions consisting of a succession of visual displays (with or without accompanying sound) capable of being selected and held for separate viewing or other use;
“qualifying contract of insurance” has the meaning given in the Regulated Activities Order;
“qualifying credit” has the meaning given by paragraph 10 of Schedule 1;
“the Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ;
“relevant insurance activity” has the meaning given by article 21;
“relevant investment activities” has the meaning given by article 30;
“solicited real time communication” has the meaning given by article 8;
“units”, in a collective investment scheme, has the meaning given by Part XVII of the Act;
“unsolicited real time communication” has the meaning given by article 8.
2
References to a person engaging in investment activity are to be construed in accordance with subsection (8) of section 21 of the Act; and for these purposes, “controlled activity” and “controlled investment” in that subsection have the meaning given in this Order.
Interpretation: unlisted companies
3
1
In this Order, an “unlisted company” means a body corporate the shares in which are not —
a
listed or quoted on an investment exchange whether in the United Kingdom or elsewhere;
b
shares in respect of which information is, with the agreement or approval of any officer of the company, published for the purpose of facilitating deals in the shares indicating prices at which persons have dealt or are willing to deal in them other than persons who, at the time the information is published, are existing members of a relevant class; or
c
subject to a marketing arrangement which accords to the company the facilities referred to in section 163(2)(b) of the 1985 Act or article 173(2)(b) of the 1986 Order.
2
For the purpose of paragraph (1)(b), a person is to be regarded as a member of a relevant class if he was, at the relevant time —
a
an existing member or debenture holder of the company;
b
an existing employee of the company;
c
a close relative of such a member or employee; or
d
a trustee (acting in his capacity as such) of a trust, the principal beneficiary of which is a person within any of sub-paragraphs (a), (b) and (c).
3
In this Order references to shares in and debentures of an unlisted company are references to —
a
in the case of a body corporate which is a company within the meaning of the 1985 Act, shares and debentures within the meaning of that Act;
b
in the case of a body corporate which is a company within the meaning of the 1986 Order, shares and debentures within the meaning of that Order;
c
in the case of any other body corporate, investments falling within paragraph 14 or 15 of Schedule 1 to this Order.
PART II
Controlled Activities and Controlled Investments
Definition of controlled activities and controlled investments
4
1
For the purposes of section 21(9) of the Act, a controlled activity is an activity which falls within any of paragraphs 1 to 11 of Schedule 1.
2
For the purposes of section 21(10) of the Act, a controlled investment is an investment which falls within any of paragraphs 12 to 27 of Schedule 1.
PART III
Exemptions: Interpretation and Application
Interpretation: financial promotion restriction
5
In this Order, any reference to the financial promotion restriction is a reference to the restriction in section 21(1) of the Act.
Interpretation: communications
6
In this Order —
a
any reference to a communication is a reference to the communication, in the course of business, of an invitation or inducement to engage in investment activity;
b
any reference to a communication being made to another person is a reference to a communication being addressed, whether orally or in legible form, to a particular person or persons (for example where it is contained in a telephone call or letter);
c
any reference to a communication being directed at persons is a reference to a communication being addressed to persons generally (for example where it is contained in a television broadcast or web site);
d
“communicate” includes causing a communication to be made or directed;
e
a “recipient” of a communication is the person to whom the communication is made or, in the case of a non-real time communication which is directed at persons generally, any person who reads or hears the communication;
f
“electronic commerce communication” means a communication, the making of which constitutes the provision of an information society service;
g
“incoming electronic commerce communication” means an electronic commerce communication made from an establishment in an EEA State other than the United Kingdom;
h
“outgoing electronic commerce communication” means an electronic commerce communication made from an establishment in the United Kingdom to a person in an EEA State other than the United Kingdom.
Interpretation: real time communications
7
1
In this Order, references to a real time communication are references to any communication made in the course of a personal visit, telephone conversation or other interactive dialogue.
2
A non-real time communication is a communication not falling within paragraph (1).
3
For the purposes of this Order, non-real time communications include communications made by letter or e-mail or contained in a publication.
4
For the purposes of this Order, the factors in paragraph (5) are to be treated as indications that a communication is a non-real time communication.
5
The factors are that —
a
the communication is made to or directed at more than one recipient in identical terms (save for details of the recipient’s identity);
b
the communication is made or directed by way of a system which in the normal course constitutes or creates a record of the communication which is available to the recipient to refer to at a later time;
c
the communication is made or directed by way of a system which in the normal course does not enable or require the recipient to respond immediately to it.
Interpretation: solicited and unsolicited real time communications
8
1
A real time communication is solicited where it is made in the course of a personal visit, telephone call or other interactive dialogue if that call, visit or dialogue —
a
was initiated by the recipient of the communication; or
b
takes place in response to an express request from the recipient of the communication.
2
A real time communication is unsolicited where it is made otherwise than as described in paragraph (1).
3
For the purposes of paragraph (1) —
a
a person is not to be treated as expressly requesting a call, visit or dialogue —
i
because he omits to indicate that he does not wish to receive any or any further visits or calls or to engage in any or any further dialogue;
ii
because he agrees to standard terms that state that such visits, calls or dialogue will take place, unless he has signified clearly that, in addition to agreeing to the terms, he is willing for them to take place;
b
a communication is solicited only if it is clear from all the circumstances when the call, visit or dialogue is initiated or requested that during the course of the visit, call or dialogue communications will be made concerning the kind of controlled activities or investments to which the communications in fact made relate;
c
it is immaterial whether the express request was made before or after this article comes into force.
4
Where a real time communication is solicited by a recipient (“R”), it is treated as having also been solicited by any other person to whom it is made at the same time as it is made to R if that other recipient is —
a
a close relative of R; or
b
expected to engage in any investment activity jointly with R.
Interpretation: outgoing electronic commerce communications
8A
1
For the purposes of the application of those articles to outgoing electronic commerce communications —
a
any reference in article 48(7)(c), 50(1)(a) or (3)(e) or 52(3)(c) to an authorised person includes a reference to a person who is entitled, under the law of an EEA State other than the United Kingdom, to carry on regulated activities in that State;
b
any reference in article 68(1) or 71 to rules or legislation includes a reference to provisions corresponding to those rules or legislation in the law of an EEA State other than the United Kingdom;
c
any reference in article 49 to an amount in pounds sterling includes a reference to an equivalent amount in another currency.
2
For the purposes of the application of article 49 to outgoing electronic commerce communications, any reference in section 264(2) or 737 of the 1985 Act (or the equivalent provisions in the 1986 Order) to a body corporate or company includes a reference to a body corporate or company registered under the law of an EEA State other than the United Kingdom.
3
For the purposes of the application of article 3 in respect of outgoing electronic commerce communications —
a
any reference in section 163(2)(b) of the 1985 Act (or the equivalent provision in the 1986 Order) to a company includes a reference to a company registered under the law of an EEA State other than the United Kingdom;
b
any reference in that section to an investment exchange includes a reference to an investment exchange which is recognised as an investment exchange under the law of an EEA State other than the United Kingdom.
Degree of prominence to be given to required indications
9
Where a communication must, if it is to fall within any provision of this Order, be accompanied by an indication of any matter, the indication must be presented to the recipient —
a
in a way that can be easily understood; and
b
in such manner as, depending on the means by which the communication is made or directed, is best calculated to bring the matter in question to the attention of the recipient and to allow him to consider it.
Application to qualifying contracts of insurance
10
1
Nothing in this Order exempts from the application of the financial promotion restriction a communication which invites or induces a person to enter into a qualifying contract of insurance with a person who is not —
a
an authorised person;
b
an exempt person who is exempt in relation to effecting or carrying out contracts of insurance of the class to which the communication relates;
c
a company which has its head office in an EEA State other than the United Kingdom and which is entitled under the law of that State to carry on there insurance business of the class to which the communication relates;
d
a company which has a branch or agency in an EEA State other than the United Kingdom and is entitled under the law of that State to carry on there insurance business of the class to which the communication relates;
e
a company authorised to carry on insurance business of the class to which the communication relates in any country or territory which is listed in Schedule 2.
2
In this article, references to a class of insurance are references to the class of insurance contract described in Schedule 1 to the Regulated Activities Order into which the effecting or carrying out of the contract to which the communication relates would fall.
Combination of different exemptions
11
1
In respect of a communication relating to —
a
a controlled activity falling within paragraph 2 of Schedule 1 carried on in relation to a qualifying contract of insurance; or
b
a controlled activity falling within any of paragraphs 3 to 11 of Schedule 1,
a person may rely on the application of one or more of the exemptions in Parts IV and VI.
2
In respect of a communication relating to —
a
an activity falling within paragraph 1 of Schedule 1; or
b
a relevant insurance activity,
a person may rely on one or more of the exemptions in Parts IV and V; and, where a communication relates to any such activity and also to an activity mentioned in paragraph (1)(a) or (b), a person may rely on one or more of the exemptions in Parts IV and V in respect of the former activity and on one or more of the exemptions in Parts V and VI in respect of the latter activity.
PART IV
Exempt Communications: All Controlled Activities
Communications to overseas recipients
12
1
Subject to paragraphs (2) and (7), the financial promotion restriction does not apply to any communication —
a
which is made (whether from inside or outside the United Kingdom) to a person who receives the communication outside the United Kingdom; or
b
which is directed (whether from inside or outside the United Kingdom) only at persons outside the United Kingdom.
2
Paragraph (1) does not apply to an unsolicited real time communication unless —
a
it is made from a place outside the United Kingdom; and
b
it is made for the purposes of a business which is carried on outside the United Kingdom and which is not carried on in the United Kingdom.
3
For the purposes of paragraph (1)(b) —
a
if the conditions set out in paragraph (4)(a), (b), (c) and (d) are met, a communication directed from a place inside the United Kingdom is to be regarded as directed only at persons outside the United Kingdom;
b
if the conditions set out in paragraph (4)(c) and (d) are met, a communication directed from a place outside the United Kingdom is to be regarded as directed only at persons outside the United Kingdom;
c
in any other case where one or more of the conditions in paragraph (4)(a) to (e) are met, that fact is to be taken into account in determining whether or not a communication is to be regarded as directed only at persons outside the United Kingdom (but a communication may still be regarded as directed only at persons outside the United Kingdom even if none of the conditions in paragraph (4) is met).
4
The conditions are that —
a
the communication is accompanied by an indication that it is directed only at persons outside the United Kingdom;
b
the communication is accompanied by an indication that it must not be acted upon by persons in the United Kingdom;
c
the communication is not referred to in, or directly accessible from, any other communication made to a person or directed at persons in the United Kingdom by the person directing the communication;
d
there are in place proper systems and procedures to prevent recipients in the United Kingdom (other than those to whom the communication might otherwise lawfully have been made by the person directing it or a member of the same group) engaging in the investment activity to which the communication relates with the person directing the communication, a close relative of his or a member of the same group;
e
the communication is included in —
i
a web site, newspaper, journal, magazine or periodical publication which is principally accessed in or intended for a market outside the United Kingdom;
ii
a radio or television broadcast or teletext service transmitted principally for reception outside the United Kingdom.
5
For the purpose of paragraph (1)(b), a communication may be treated as directed only at persons outside the United Kingdom even if —
a
it is also directed, for the purposes of article 19(1)(b), at investment professionals falling within article 19(5) (but disregarding paragraph (6) of that article for this purpose);
b
it is also directed, for the purposes of article 49(1)(b), at high net worth persons to whom article 49 applies (but disregarding paragraph (2)(e) of that article for this purpose) and it relates to a controlled activity to which article 49 applies;
c
it is a communication to which article 31 applies.
6
Where a communication falls within paragraph (5)(a) or (b) —
a
the condition in paragraph (4)(a) is to be construed as requiring an indication that the communication is directed only at persons outside the United Kingdom or persons having professional experience in matters relating to investments or high net worth persons (as the case may be);
b
the condition in paragraph (4)(b) is to be construed as requiring an indication that the communication must not be acted upon by persons in the United Kingdom except by persons who have professional experience in matters relating to investments or who are not high net worth persons (as the case may be);
c
the condition in paragraph (4)(c) will not apply where the other communication referred to in that paragraph is made to a person or directed at a person in the United Kingdom to whom paragraph (5) applies.
7
Paragraph (1) does not apply to an outgoing electronic commerce communication.
Communications from customers and potential customers
13
1
The financial promotion restriction does not apply to any communication made by or on behalf of a person (“customer”) to one other person (“supplier”) —
a
in order to obtain information about a controlled investment available from or a controlled service provided by the supplier; or
b
in order that the customer can acquire a controlled investment from that supplier or be supplied with a controlled service by that supplier.
2
For the purposes of paragraph (1), a controlled service is a service the provision of which constitutes engaging in a controlled activity by the supplier.
Follow up non-real time communications and solicited real time communications
14
1
Where a person makes or directs a communication (“the first communication”) which is exempt from the financial promotion restriction because, in compliance with the requirements of another provision of this Order, it is accompanied by certain indications or contains certain information, then the financial promotion restriction does not apply to any subsequent communication which complies with the requirements of paragraph (2).
2
The requirements of this paragraph are that the subsequent communication —
a
is a non-real time communication or a solicited real time communication;
b
is made by, or on behalf of, the same person who made the first communication;
c
is made to a recipient of the first communication;
d
relates to the same controlled activity and the same controlled investment as the first communication; and
e
is made within 12 months of the recipient receiving the first communication.
3
The provisions of this article only apply in the case of a person who makes or directs a communication on behalf of another where the first communication is made by that other person.
4
Where a person makes or directs a communication on behalf of another person in reliance on the exemption contained in this article the person on whose behalf the communication was made or directed remains responsible for the content of that communication.
5
A communication made or directed before this article comes into force is to be treated as a first communication falling within paragraph (1) if it would have fallen within that paragraph had it been made or directed after this article comes into force.
Introductions
15
1
If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any communication which is made with a view to or for the purposes of introducing the recipient to —
a
an authorised person who carries on the controlled activity to which the communication relates; or
b
an exempt person where the communication relates to a controlled activity which is also a regulated activity in relation to which he is an exempt person.
2
The requirements of this paragraph are that —
a
the maker of the communication (“A”) is not a close relative of, nor a member of the same group as, the person to whom the introduction is, or is to be, made;
b
A does not receive from any person other than the recipient any pecuniary reward or other advantage arising out of his making the introduction; and
c
it is clear in all the circumstances that the recipient, in his capacity as an investor, is not seeking and has not sought advice from A as to the merits of the recipient engaging in investment activity (or, if the client has sought such advice, A has declined to give it, but has recommended that the recipient seek such advice from an authorised person).
Exempt persons
16
1
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is made or directed by an exempt person; and
c
is for the purposes of that exempt person’s business of carrying on a controlled activity which is also a regulated activity in relation to which he is an exempt person.
2
The financial promotion restriction does not apply to any unsolicited real time communication made by a person (“ AR ”) who is an appointed representative (within the meaning of section 39(2) of the Act) where —
a
the communication is made by AR in carrying on the business —
i
for which his principal (“ P ”) has accepted responsibility for the purposes of section 39 of the Act; and
ii
in relation to which AR is exempt from the general prohibition by virtue of that section; and
b
the communication is one which, if it were made by P, would comply with any rules made by the Authority under section 145 of the Act (financial promotion rules) which are relevant to a communication of that kind.
Generic promotions
17
The financial promotion restriction does not apply to any communication which —
a
does not identify (directly or indirectly) a person who provides the controlled investment to which the communication relates; and
b
does not identify (directly or indirectly) any person as a person who carries on a controlled activity in relation to that investment.
Communications caused to be made or directed by unauthorised persons
17A
1
If a condition in paragraph (2) is met, the financial promotion restriction does not apply to a communication caused to be made or directed by an unauthorised person which is made or directed by an authorised person.
2
The conditions in this paragraph are that —
a
the authorised person prepared the content of the communication; or
b
it is a real-time communication.
Mere conduits
18
1
Subject to paragraph (4), the financial promotion restriction does not apply to any communication which is made or directed by a person who acts as a mere conduit for it.
2
A person acts as a mere conduit for a communication if —
a
he communicates it in the course of an activity carried on by him, the principal purpose of which is transmitting or receiving material provided to him by others;
b
the content of the communication is wholly devised by another person; and
c
the nature of the service provided by him in relation to the communication is such that he does not select, modify or otherwise exercise control over its content prior to its transmission or receipt.
3
For the purposes of paragraph (2)(c) a person does not select, modify or otherwise exercise control over the content of a communication merely by removing or having the power to remove material —
a
which is, or is alleged to be, illegal, defamatory or in breach of copyright;
b
in response to a request to a body which is empowered by or under any enactment to make such a request; or
c
when otherwise required to do so by law.
4
Nothing in paragraph (1) prevents the application of the financial promotion restriction in so far as it relates to the person who has caused the communication to be made or directed.
5
This article does not apply to an electronic commerce communication.
Electronic commerce communications: mere conduits, caching and hosting
18A
The financial promotion restriction does not apply to an electronic commerce communication in circumstances where —
a
the making of the communication constitutes the provision of an information society service of a kind falling within paragraph 1 of Article 12, 13 or 14 of the electronic commerce directive (“mere conduit”, “caching” and “hosting”); and
b
the conditions mentioned in the paragraph in question, to the extent that they are applicable at the time of, or prior to, the making of the communication, are or have been met at that time.
Investment professionals
19
1
The financial promotion restriction does not apply to any communication which —
a
is made only to recipients whom the person making the communication believes on reasonable grounds to be investment professionals; or
b
may reasonably be regarded as directed only at such recipients.
2
For the purposes of paragraph (1)(b), if all the conditions set out in paragraph (4)(a) to (c) are met in relation to the communication, it is to be regarded as directed only at investment professionals.
3
In any other case in which one or more of the conditions set out in paragraph (4)(a) to (c) are met, that fact is to be taken into account in determining whether the communication is directed only at investment professionals (but a communication may still be regarded as so directed even if none of the conditions in paragraph (4) is met).
4
The conditions are that —
a
the communication is accompanied by an indication that it is directed at persons having professional experience in matters relating to investments and that any investment or investment activity to which it relates is available only to such persons or will be engaged in only with such persons;
b
the communication is accompanied by an indication that persons who do not have professional experience in matters relating to investments should not rely on it;
c
there are in place proper systems and procedures to prevent recipients other than investment professionals engaging in the investment activity to which the communication relates with the person directing the communication, a close relative of his or a member of the same group.
5
“Investment professionals” means —
a
an authorised person;
b
an exempt person where the communication relates to a controlled activity which is a regulated activity in relation to which the person is exempt;
c
any other person —
i
whose ordinary activities involve him in carrying on the controlled activity to which the communication relates for the purpose of a business carried on by him; or
ii
who it is reasonable to expect will carry on such activity for the purposes of a business carried on by him;
d
a government, local authority (whether in the United Kingdom or elsewhere) or an international organisation;
e
a person (“A”) who is a director, officer or employee of a person (“B”) falling within any of sub-paragraphs (a) to (d) where the communication is made to A in that capacity and where A’s responsibilities when acting in that capacity involve him in the carrying on by B of controlled activities.
6
For the purposes of paragraph (1), a communication may be treated as made only to or directed only at investment professionals even if it is also made to or directed at other persons to whom it may lawfully be communicated.
Communications by journalists
20
1
Subject to paragraph (2), the financial promotion restriction does not apply to any non-real time communication if —
a
the content of the communication is devised by a person acting in the capacity of a journalist;
b
the communication is contained in a qualifying publication; and
c
in the case of a communication requiring disclosure, one of the conditions in paragraph (2) is met.
2
The conditions in this paragraph are that —
a
the communication is accompanied by an indication explaining the nature of the author’s financial interest or that of a member of his family (as the case may be);
b
the authors are subject to proper systems and procedures which prevent the publication of communications requiring disclosure without the explanation referred to in sub-paragraph (a); or
c
the qualifying publication in which the communication appears falls within the remit of —
i
the Code of Practice issued by the Press Complaints Commission;
ii
the OFCOM Broadcasting Code; or
iii
the Producers' Guidelines issued by the British Broadcasting Corporation.
3
For the purposes of this article, a communication requires disclosure if —
a
an author of the communication or a member of his family is likely to obtain a financial benefit or avoid a financial loss if people act in accordance with the invitation or inducement contained in the communication;
b
the communication relates to a controlled investment of a kind falling within paragraph (4); and
c
the communication identifies directly a person who issues or provides the controlled investment to which the communication relates.
4
A controlled investment falls within this paragraph if it is —
a
an investment falling within paragraph 14 of Schedule 1 (shares or stock in share capital);
b
an investment falling within paragraph 21 of that Schedule (options) to acquire or dispose of an investment falling within sub-paragraph (a);
c
an investment falling within paragraph 22 of that Schedule (futures) being rights under a contract for the sale of an investment falling within sub-paragraph (a); or
d
an investment falling within paragraph 23 of that Schedule (contracts for differences etc. ) being rights under a contract relating to, or to fluctuations in, the value or price of an investment falling within sub-paragraph (a).
5
For the purposes of this article —
a
the authors of the communication are the person who devises the content of the communication and the person who is responsible for deciding to include the communication in the qualifying publication;
b
a “qualifying publication” is a publication or service of the kind mentioned in paragraph (1) or (2) of article 54 of the Regulated Activities Order and which is of the nature described in that article, and for the purposes of this article, a certificate given under paragraph (3) of article 54 of that Order and not revoked is conclusive evidence of the matters certified;
c
the members of a person’s family are his spouse and any children of his under the age of 18 years.
Promotion broadcast by company director etc.
20A
1
The financial promotion restriction does not apply to a communication which is communicated as part of a qualifying service by a person (“D”) who is a director or employee of an undertaking (“U”) where —
a
the communication invites or induces the recipient to acquire —
i
a controlled investment of the kind falling within article 20(4) which is issued by U (or by an undertaking in the same group as U); or
ii
a controlled investment issued or provided by an authorised person in the same group as U;
b
the communication —
i
comprises words which are spoken by D and not broadcast, transmitted or displayed in writing; or
ii
is displayed in writing only because it forms part of an interactive dialogue to which D is a party and in the course of which D is expected to respond immediately to questions put by a recipient of the communication;
c
the communication is not part of an organised marketing campaign; and
d
the communication is accompanied by an indication that D is a director or employee (as the case may be) of U.
2
For the purposes of this article, a “qualifying service” is a service —
a
which is broadcast or transmitted in the form of television or radio programmes; or
b
displayed on a web site (or similar system for the electronic display of information) comprising regularly updated news and information,
provided that the principal purpose of the service, taken as a whole and including any advertisements and other promotional material contained in it, is neither of the purposes described in article 54(1)(a) or (b) of the Regulated Activities Order.
3
For the purposes of paragraph (2), a certificate given under article 54(3) of the Regulated Activities Order and not revoked is conclusive evidence of the matters certified.
Incoming electronic commerce communications
20B
1
The financial promotion restriction does not apply to an incoming electronic commerce communication.
2
Paragraph (1) does not apply to —
a
a communication which constitutes an advertisement by the operator of a UCITS directive scheme of units in that scheme;
b
a communication consisting of an invitation or inducement to enter into a contract of insurance, where —
i
the communication is made by an undertaking which has received official authorisation in accordance with Article 4 of the life assurance consolidation directive or the first non-life insurance directive, and
ii
the insurance falls within the scope of any of the insurance directives; or
c
an unsolicited communication made by electronic mail.
3
In this article, “UCITS directive scheme” means an undertaking for collective investment in transferable securities which is subject to Directive 85/611/ EEC of the Council of the European Communities of 20 December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities , and has been authorised in accordance with Article 4 of that Directive.
4
For the purposes of this article, a communication by electronic mail is to be regarded as unsolicited, unless it is made in response to an express request from the recipient of the communication.
PART V
Exempt Communications: Deposits and Insurance
Interpretation: relevant insurance activity
21
In this Part, a “relevant insurance activity” means a controlled activity falling within paragraph 2 of Schedule 1 carried on in relation to an investment falling within paragraph 13 of that Schedule where that investment is not a qualifying contract of insurance.
Deposits: non-real time communications
22
1
If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any non-real time communication which relates to a controlled activity falling within paragraph 1 of Schedule 1.
2
The requirements of this paragraph are that the communication is accompanied by an indication —
a
of the full name of the person with whom the investment which is the subject of the communication is to be made (“deposit-taker”);
b
of the country or territory in which a deposit-taker that is a body corporate is incorporated (described as such);
c
if different, of the country or territory in which the deposit-taker’s principal place of business is situated (described as such);
d
whether or not the deposit-taker is regulated in respect of his deposit-taking business;
e
if the deposit-taker is so regulated, of the name of the regulator in the deposit-taker’s principal place of business, or if there is more than one such regulator, the prudential regulator;
f
whether any transaction to which the communication relates would, if entered into by the recipient and the deposit-taker, fall within the jurisdiction of any dispute resolution scheme or deposit guarantee scheme and if so, identifying each such scheme;
g
the necessary capital information.
3
In this article —
“full name”, in relation to a person, means the name under which that person carries on business and, if different, that person’s corporate name;
“liabilities” includes provisions where such provisions have not been deducted from the value of the assets;
“necessary capital information” means —
in relation to a deposit-taker which is a body corporate, either the amount of its paid up capital and reserves, described as such, or a statement that the amount of its paid up capital and reserves exceeds a particular amount (stating it);
in relation to a deposit-taker which is not a body corporate, either the amount of the total assets less liabilities (described as such) or a statement that the amount of its total assets exceeds a particular amount (stating it) and that its total liabilities do not exceed a particular amount (stating it).
Deposits: real time communications
23
The financial promotion restriction does not apply to any real time communication (whether solicited or unsolicited) which relates to an activity falling within paragraph 1 of Schedule 1.
Relevant insurance activity: non-real time communications
24
1
If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any non-real time communication which relates to a relevant insurance activity.
2
The requirements of this paragraph are that the communication is accompanied by an indication —
a
of the full name of the person with whom the investment which is the subject of the communication is to be made (“the insurer”);
b
of the country or territory in which the insurer is incorporated (described as such);
c
if different, of the country or territory in which the insurer’s principal place of business is situated (described as such);
d
whether or not the insurer is regulated in respect of its insurance business;
e
if the insurer is so regulated, of the name of the regulator of the insurer in its principal place of business or, if there is more than one such regulator, the name of the prudential regulator;
f
whether any transaction to which the communication relates would, if entered into by the recipient and the insurer, fall within the jurisdiction of any dispute resolution scheme or compensation scheme and if so, identifying each such scheme.
3
In this article “full name”, in relation to a person, means the name under which that person carries on business and, if different, that person’s corporate name.
Relevant insurance activity: non-real time communications: reinsurance and large risks
25
1
The financial promotion restriction does not apply to any non-real time communication which relates to a relevant insurance activity and concerns only —
a
a contract of reinsurance; or
b
a contract that covers large risks.
2
“Large risks” means —
a
risks falling within paragraph 4 (railway rolling stock), 5 (aircraft), 6 (ships), 7 (goods in transit), 11 (aircraft liability) or 12 (liability of ships) of Schedule 1 to the Regulated Activities Order;
b
risks falling within paragraph 14 (credit) or 15 (suretyship) of that Schedule provided that the risks relate to a business carried on by the recipient;
c
risks falling within paragraph 3 (land vehicles), 8 (fire and natural forces), 9 (damage to property), 10 (motor vehicle liability), 13 (general liability) or 16 (miscellaneous financial loss) of that Schedule provided that the risks relate to a business carried on by the recipient and that the condition specified in paragraph (3) is met in relation to that business.
3
The condition specified in this paragraph is that at least two of the three following criteria were exceeded in the most recent financial year for which information is available prior to the making of the communication —
a
the balance sheet total of the business (within the meaning of section 247(5) of the 1985 Act or article 255(5) of the 1986 Order) was 6.2 million euros;
b
the net turnover (within the meaning given to “turnover” by section 262(1) of the 1985 Act or article 270(1) of the 1986 Order) was 12.8 million euros;
c
the number of employees (within the meaning given by section 247(6) of the 1985 Act or article 255(6) of the 1986 Order) was 250;
and for a financial year which is a company’s financial year but not in fact a year, the net turnover of the recipient shall be proportionately adjusted.
4
For the purposes of paragraph (3), where the recipient is a member of a group for which consolidated accounts (within the meaning of the Seventh Company Law Directive) are drawn up, the question whether the condition met in that paragraph is met is to be determined by reference to those accounts.
Relevant insurance activity: real time communication
26
The financial promotion restriction does not apply to any real time communication (whether solicited or unsolicited) which relates to a relevant insurance activity.
PART VI
Exempt Communications: Certain Controlled Activities
Application of exemptions in this Part
27
Except where otherwise stated, the exemptions in this Part apply to communications which relate to —
a
a controlled activity falling within paragraph 2 of Schedule 1 carried on in relation to a qualifying contract of insurance;
b
controlled activities falling within any of paragraphs 3 to 11 of Schedule 1.
One off non-real time communications and solicited real time communications
28
1
The financial promotion restriction does not apply to a one off communication which is either a non-real time communication or a solicited real time communication.
2
If all the conditions set out in paragraph (3) are met in relation to a communication it is to be regarded as a one off communication. In any other case in which one or more of those conditions are met, that fact is to be taken into account in determining whether the communication is a one off communication (but a communication may still be regarded as a one off communication even if none of the conditions in paragraph (3) is met).
3
The conditions are that —
a
the communication is made only to one recipient or only to one group of recipients in the expectation that they would engage in any investment activity jointly;
b
the identity of the product or service to which the communication relates has been determined having regard to the particular circumstances of the recipient;
c
the communication is not part of an organised marketing campaign.
One off unsolicited real time communications
28A
1
The financial promotion restriction does not apply to an unsolicited real time communication if the conditions in paragraph (2) are met.
2
The conditions in this paragraph are that —
a
the communication is a one off communication;
b
the communicator believes on reasonable grounds that the recipient understands the risks associated with engaging in the investment activity to which the communication relates;
c
at the time that the communication is made, the communicator believes on reasonable grounds that the recipient would expect to be contacted by him in relation to the investment activity to which the communication relates.
3
Paragraphs (2) and (3) of article 28 apply in determining whether a communication is a one off communication for the purposes of this article as they apply for the purposes of article 28.
Real time communications: introductions in connection with qualifying credit
28B
1
If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any real time communication which —
a
relates to a controlled activity falling within paragraphs 10, 10A or 10B of Schedule 1; and
b
is made for the purpose of, or with a view to, introducing the recipient to a person (“N”) who is —
i
an authorised person who carries on the controlled activity to which the communication relates,
ii
an appointed representative, where the controlled activity to which the communication relates is also a regulated activity in respect of which he is exempt from the general prohibition, or
iii
an overseas person who carries on the controlled activity to which the communication relates.
2
The requirements of this paragraph are that the maker of the communication (“M”) —
a
does not receive any money, other than money payable to M on his own account, paid by the recipient for or in connection with any transaction which the recipient enters into with or through N as a result of the introduction; and
b
before making the introduction, discloses to the recipient such of the information mentioned in paragraph (3) as applies to M.
3
That information is —
a
that M is a member of the same group as N;
b
details of any payment which M will receive from N, by way of fee or commission, for introducing the recipient to N;
c
an indication of any other reward or advantage received or to be received by M that arises out of his making introductions to N.
4
In this article, “overseas person” means a person who carries on controlled activities which fall within paragraph 10, 10A or 10B of Schedule 1, but who does not carry on any such activity, or offer to do so, from a permanent place of business maintained by him in the United Kingdom.
Communications required or authorised by enactments
29
1
Subject to paragraph (2), the financial promotion restriction does not apply to any communication which is required or authorised by or under any enactment other than the Act.
2
This article does not apply to a communication which relates to a controlled activity falling within paragraph 10, 10A or 10B of Schedule 1 or within paragraph 11 in so far as it relates to that activity.
Overseas communicators: solicited real time communications
30
1
The financial promotion restriction does not apply to any solicited real time communication which is made by an overseas communicator from outside the United Kingdom in the course of or for the purposes of his carrying on the business of engaging in relevant investment activities outside the United Kingdom.
2
In this article —
“overseas communicator” means a person who carries on relevant investment activities outside the United Kingdom but who does not carry on any such activity from a permanent place of business maintained by him in the United Kingdom;
“relevant investment activities” means controlled activities which fall within paragraphs 3 to 7 or 10 to 10B of Schedule 1 or, so far as relevant to any of those paragraphs, paragraph 11 of that Schedule.
Overseas communicators: non-real time communications to previously overseas customers
31
1
The financial promotion restriction does not apply to any non-real time communication which is communicated by an overseas communicator from outside the United Kingdom to a previously overseas customer of his.
2
In this article a “previously overseas customer” means a person with whom the overseas communicator has done business within the period of twelve months ending with the day on which the communication was received (“the earlier business”) and where —
a
at the time that the earlier business was done, the customer was neither resident in the United Kingdom nor had a place of business there; or
b
at the time the earlier business was done, the overseas communicator had on a former occasion done business with the customer, being business of the same description as the business to which the communication relates, and on that former occasion the customer was neither resident in the United Kingdom nor had a place of business there.
3
For the purposes of this article, an overseas communicator has done business with a customer if, in the course of carrying on his relevant investment activities outside the United Kingdom, he has —
a
effected a transaction, or arranged for a transaction to be effected, with the customer;
b
provided, outside the United Kingdom; a service to the customer as described in paragraph 6 of Schedule 1 (whether or not that paragraph was in force at the time the business was done); or
c
given, outside the United Kingdom, any advice to the customer as described in paragraph 7 of that Schedule (whether or not that paragraph was in force at the time the business was done).
Overseas communicators: unsolicited real time communications to previously overseas customers
32
1
If the requirements of paragraphs (2) and (3) are met, the financial promotion restriction does not apply to an unsolicited real time communication which is made by an overseas communicator from outside the United Kingdom to a previously overseas customer of his.
2
The requirements of this paragraph are that the terms on which previous transactions and services had been effected or provided by the overseas communicator to the previously overseas customer were such that the customer would reasonably expect, at the time that the unsolicited real time communication is made, to be contacted by the overseas communicator in relation to the investment activity to which the communication relates.
3
The requirements of this paragraph are that the previously overseas customer has been informed by the overseas communicator on an earlier occasion —
a
that the protections conferred by or under the Act will not apply to any unsolicited real time communication which is made by the overseas communicator and which relates to that investment activity;
b
that the protections conferred by or under the Act may not apply to any investment activity that may be engaged in as a result of the communication; and
c
whether any transaction between them resulting from the communication would fall within the jurisdiction of any dispute resolution scheme or compensation scheme or, if there is no such scheme, of that fact.
Overseas communicators: unsolicited real time communications to knowledgeable customers
33
1
If the requirements of paragraphs (2), (3) and (4) are met, the financial promotion restriction does not apply to an unsolicited real time communication which is made by an overseas communicator from outside the United Kingdom in the course of his carrying on relevant investment activities outside the United Kingdom.
2
The requirements of this paragraph are that the overseas communicator believes on reasonable grounds that the recipient is sufficiently knowledgeable to understand the risks associated with engaging in the investment activity to which the communication relates.
3
The requirements of this paragraph are that, in relation to any particular investment activity, the recipient has been informed by the overseas communicator on an earlier occasion —
a
that the protections conferred by or under the Act will not apply to any unsolicited real time communication which is made by him and which relates to that activity;
b
that the protections conferred by or under the Act may not apply to any investment activity that may be engaged in as a result of the communication; and
c
whether any transaction between them resulting from the communication would fall within the jurisdiction of any dispute resolution scheme or compensation scheme or, if there is no such scheme, of that fact.
4
The requirements of this paragraph are that the recipient, after being given a proper opportunity to consider the information given to him in accordance with paragraph (3), has clearly signified that he understands the warnings referred to in paragraph (3)(a) and (b) and that he accepts that he will not benefit from the protections referred to.
Governments, central banks etc.
34
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is communicated by and relates only to controlled investments issued, or to be issued, by —
i
any government;
ii
any local authority (in the United Kingdom or elsewhere);
iii
any international organisation;
iv
the Bank of England;
v
the European Central Bank;
vi
the central bank of any country or territory outside the United Kingdom.
Industrial and provident societies
35
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is communicated by an industrial and provident society; and
c
relates only to an investment falling within paragraph 15 of Schedule 1 issued, or to be issued, by the society in question.
Nationals of EEA States other than United Kingdom
36
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is communicated by a national of an EEA State other than the United Kingdom in the course of any controlled activity lawfully carried on by him in that State; and
c
conforms with any rules made by the Authority under section 145 of the Act (financial promotion rules) which are relevant to a communication of that kind.
Financial markets
37
1
The financial promotion restriction does not apply to any communication —
a
which is a non-real time communication or a solicited real time communication;
b
which is communicated by a relevant market; and
c
to which paragraph (2) or (3) applies.
2
This paragraph applies to a communication if —
a
it relates only to facilities provided by the market; and
b
it does not identify (directly or indirectly) —
i
any particular investment issued, or to be issued, by or available from an identified person as one that may be traded or dealt in on the market; or
ii
any particular person as a person through whom transactions on the market may be effected.
3
This paragraph applies to a communication if —
a
it relates only to a particular investment falling within paragraph 21, 22 or 23 of Schedule 1; and
b
it identifies the investment as one that may be traded or dealt in on the market.
4
“Relevant market” means a market which —
a
meets the criteria specified in Part I of Schedule 3; or
b
is specified in, or is established under the rules of an exchange specified in, Part II, III or IV of that Schedule.
Persons in the business of placing promotional material
38
The financial promotion restriction does not apply to any communication which is made to a person whose business it is to place, or arrange for the placing of, promotional material provided that it is communicated so that he can place or arrange for placing it.
Joint enterprises
39
1
The financial promotion restriction does not apply to any communication which is made or directed by a participator in a joint enterprise to or at another participator in the same joint enterprise in connection with, or for the purposes of, that enterprise.
2
“Joint enterprise” means an enterprise into which two or more persons (“the participators”) enter for commercial purposes related to a business or businesses (other than the business of engaging in a controlled activity) carried on by them; and, where a participator is a member of a group, each other member of the group is also to be regarded as a participator in the enterprise.
3
“Participator” includes potential participator.
Participants in certain recognised collective investment schemes
40
The financial promotion restriction does not apply to any non-real time communication or solicited real time communication which is made —
a
by a person who is the operator of a scheme recognised under section 270 or 272 of the Act; and
b
to persons in the United Kingdom who are participants in any such recognised scheme operated by the person making the communication,
and which relates only to such recognised schemes as are operated by that person or to units in such schemes.
Bearer instruments: promotions required or permitted by market rules
41
1
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is communicated by a body corporate (“A”) that is not an open-ended investment company;
c
is made to or may reasonably be regarded as directed at persons entitled to bearer instruments issued by A, a parent undertaking of A or a subsidiary undertaking of A; and
d
is required or permitted by the rules of a relevant market to be communicated to holders of instruments of a class which consists of or includes the bearer instruments in question.
2
“Bearer instrument” means any of the following investments title to which is capable of being transferred by delivery —
a
any investment falling within paragraph 14 or 15 of Schedule 1;
b
any investment falling within paragraph 17 or 18 of that Schedule which confers rights in respect of an investment falling within paragraph 14 or 15.
3
For the purposes of this article, a bearer instrument falling within paragraph 17 or 18 of Schedule 1 is treated as issued by the person (“P”) who issued the investment in respect of which the bearer instrument confers rights if it is issued by —
a
an undertaking in the same group as P; or
b
a person acting on behalf of, or pursuant to arrangements made with, P.
4
“Relevant market”, in relation to instruments of any particular class, means any market on which instruments of that class can be traded or dealt in and which —
a
meets the criteria specified in Part I of Schedule 3; or
b
is specified in, or established under the rules of an exchange specified in, Part II or III of that Schedule.
Bearer instruments: promotions to existing holders
42
1
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is communicated by a body corporate (“A”) that is not an open-ended investment company;
c
is made to or may reasonably be regarded as directed at persons entitled to bearer instruments issued by A, a parent undertaking of A or a subsidiary undertaking of A;
d
relates only to instruments of a class which consists of or includes either the bearer instruments to which the communication relates or instruments in respect of which those bearer instruments confer rights; and
e
is capable of being accepted or acted on only by persons who are entitled to instruments (whether or not bearer instruments) issued by A, a parent undertaking of A or a subsidiary undertaking of A.
2
“Bearer instruments” has the meaning given by article 41.
3
For the purposes of this article, an instrument falling within paragraph 17 or 18 of Schedule 1 is treated as issued by the person (“P”) who issued the investment in respect of which the bearer instrument confers rights if it is issued by —
a
an undertaking in the same group as P; or
b
a person acting on behalf of, or pursuant to arrangements made with, P.
Members and creditors of certain bodies corporate
43
1
The financial promotion restriction does not apply to any non-real time communication or solicited real time communication which is communicated —
a
by, or on behalf of, a body corporate (“A”) that is not an open-ended investment company; and
b
to persons whom the person making or directing the communication believes on reasonable grounds to be persons to whom paragraph (2) applies,
and which relates only to a relevant investment which is issued or to be issued by A, or by an undertaking (“U”) in the same group as A that is not an open-ended investment company.
2
This paragraph applies to —
a
a creditor or member of A or of U;
b
a person who is entitled to a relevant investment which is issued, or to be issued, by A or by U;
c
a person who is entitled, whether conditionally or unconditionally, to become a member of A or of U but who has not yet done so;
d
a person who is entitled, whether conditionally or unconditionally, to have transferred to him title to a relevant investment which is issued by A or by U but has not yet acquired title to the investment.
3
“Relevant investment” means —
a
an investment falling within paragraph 14 or 15 of Schedule 1;
b
an investment falling within paragraph 17 or 18 of that Schedule so far as relating to any investments within sub-paragraph (a).
4
For the purposes of this article, an investment falling within paragraph 17 or 18 of Schedule 1 is treated as issued by the person (“P”) who issued the investment in respect of which the instrument confers rights if it is issued by —
a
an undertaking in the same group as P; or
b
a person acting on behalf of, or pursuant to arrangements made with, P.
Members and creditors of open-ended investment companies
44
1
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is communicated by, or on behalf of, a body corporate (“A”) that is an open-ended investment company;
c
is communicated to persons whom the person making or directing the communication believes on reasonable grounds to be persons to whom paragraph (2) applies; and
d
relates only to an investment falling within paragraph 15, 17 or 19 of Schedule 1 which is issued, or to be issued, by A.
2
This paragraph applies to —
a
a creditor or member of A;
b
a person who is entitled to an investment falling within paragraph 15, 17 or 19 of Schedule 1 which is issued, or to be issued, by A;
c
a person who is entitled, whether conditionally or unconditionally, to become a member of A but who has not yet done so;
d
a person who is entitled, whether conditionally or unconditionally, to have transferred to him title to an investment falling within paragraph 15, 17 or 19 of Schedule 1 which is issued by A but has not yet acquired title to the investment.
3
For the purposes of this article, an investment falling within paragraph 17 of Schedule 1 is treated as issued by the person (“P”) who issued the investment in respect of which the instrument confers rights if it is issued by —
a
an undertaking in the same group as P; or
b
a person acting on behalf of, or pursuant to arrangements made with, P.
Group companies
45
The financial promotion restriction does not apply to any communication made by one body corporate in a group to another body corporate in the same group.
Qualifying credit to bodies corporate
46
The financial promotion restriction does not apply to any communication which relates to a controlled activity falling within paragraph 10, 10A or 10B of Schedule 1 (or within paragraph 11 so far as it relates to that activity) if the communication is —
a
made to or directed at bodies corporate only; or
b
accompanied by an indication that the qualifying credit to which it relates is only available to bodies corporate.
Persons in the business of disseminating information
47
1
The financial promotion restriction does not apply to any communication which is made only to recipients whom the person making the communication believes on reasonable grounds to be persons to whom paragraph (2) applies.
2
This paragraph applies to —
a
a person who receives the communication in the course of a business which involves the dissemination through a publication of information concerning controlled activities;
b
a person whilst acting in the capacity of director, officer or employee of a person falling within sub-paragraph (a) being a person whose responsibilities when acting in that capacity involve him in the business referred to in that sub-paragraph;
c
any person to whom the communication may otherwise lawfully be made.
Certified high net worth individuals
48
1
If the requirements of paragraphs (4) and (7) are met, the financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is made to an individual whom the person making the communication believes on reasonable grounds to be a certified high net worth individual, and
c
relates only to one or more investments falling within paragraph (8).
2
“Certified high net worth individual” means an individual who has signed, within the period of twelve months ending with the day on which the communication is made, a statement complying with Part I of Schedule 5.
3
The validity of a statement signed for the purposes of paragraph (2) is not affected by a defect in the form or wording of the statement, provided that the defect does not alter the statement’s meaning and that the words shown in bold type in Part I of Schedule 5 are so shown in the statement.
4
The requirements of this paragraph are that either the communication is accompanied by the giving of a warning in accordance with paragraphs (5) and (6) or where, because of the nature of the communication, this is not reasonably practicable, —
a
a warning in accordance with paragraph (5) is given to the recipient orally at the beginning of the communication together with an indication that he will receive the warning in legible form and that, before receipt of that warning, he should consider carefully any decision to engage in investment activity to which the communication relates; and
b
a warning in accordance with paragraphs (5) and (6) (d) to (h) is sent to the recipient of the communication within two business days of the day on which the communication is made.
5
The warning must be in the following terms —
The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.
.
But where a warning is sent pursuant to paragraph (4)(b), for the words “this promotion” in both places where they occur there must be substituted wording which clearly identifies the promotion which is the subject of the warning.
6
The warning must —
a
be given at the beginning of the communication;
b
precede any other written or pictorial matter;
c
be in a font size consistent with the text forming the remainder of the communication;
d
be indelible;
e
be legible;
f
be printed in black, bold type;
g
be surrounded by a black border which does not interfere with the text of the warning; and
h
not be hidden, obscured or interrupted by any other written or pictorial matter.
7
The requirements of this paragraph are that the communication is accompanied by an indication —
a
that it is exempt from the general restriction (in section 21 of the Act) on the communication of invitations or inducements to engage in investment activity on the ground that it is made to a certified high net worth individual;
b
of the requirements that must be met for an individual to qualify as a certified high net worth individual; and
c
that any individual who is in any doubt about the investment to which the communication relates should consult an authorised person specialising in advising on investments of the kind in question.
8
An investment falls within this paragraph if —
a
it is an investment falling within paragraph 14 of Schedule 1 being stock or shares in an unlisted company;
b
it is an investment falling within paragraph 15 of Schedule 1 being an investment acknowledging the indebtedness of an unlisted company;
c
it is an investment falling within paragraph 17 or 18 of Schedule 1 conferring entitlement or rights with respect to investments falling within sub-paragraph (a) or (b);
d
it comprises units in a collective investment scheme being a scheme which invests wholly or predominantly in investments falling within sub-paragraph (a) or (b);
e
it is an investment falling within paragraph 21 of Schedule 1 being an option to acquire or dispose of an investment falling within sub-paragraph (a), (b) or (c);
f
it is an investment falling within paragraph 22 of Schedule 1 being rights under a contract for the sale of an investment falling within sub-paragraph (a), (b) or (c);
g
it is an investment falling within paragraph 23 of Schedule 1 being a contract relating to, or to fluctuations in value or price of, an investment falling within sub-paragraph (a), (b) or (c),
provided in each case that it is an investment under the terms of which the investor cannot incur a liability or obligation to pay or contribute more than he commits by way of investment.
9
“Business day” means any day except a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom.
High net worth companies, unincorporated associations etc.
49
1
The financial promotion restriction does not apply to any communication which —
a
is made only to recipients whom the person making the communication believes on reasonable grounds to be persons to whom paragraph (2) applies; or
b
may reasonably be regarded as directed only at persons to whom paragraph (2) applies.
2
This paragraph applies to —
a
any body corporate which has, or which is a member of the same group as an undertaking which has, a called-up share capital or net assets of not less than —
i
if the body corporate has more than 20 members or is a subsidiary undertaking of an undertaking which has more than 20 members, £500,000;
ii
otherwise, £5 million;
b
any unincorporated association or partnership which has net assets of not less than £5 million;
c
the trustee of a high value trust;
d
any person (“A”) whilst acting in the capacity of director, officer or employee of a person (“B”) falling within any of sub-paragraphs (a) to (c) where A’s responsibilities, when acting in that capacity, involve him in B’s engaging in investment activity;
e
any person to whom the communication may otherwise lawfully be made.
3
For the purposes of paragraph (1)(b) —
a
if all the conditions set out in paragraph (4)(a) to (c) are met, the communication is to be regarded as directed at persons to whom paragraph (2) applies;
b
in any other case in which one or more of those conditions are met, that fact is to be taken into account in determining whether the communication is directed at persons to whom paragraph (2) applies (but a communication may still be regarded as so directed even if none of the conditions in paragraph (4) is met).
4
The conditions are that —
a
the communication includes an indication of the description of persons to whom it is directed and an indication of the fact that the controlled investment or controlled activity to which it relates is available only to such persons;
b
the communication includes an indication that persons of any other description should not act upon it;
c
there are in place proper systems and procedures to prevent recipients other than persons to whom paragraph (2) applies engaging in the investment activity to which the communication relates with the person directing the communication, a close relative of his or a member of the same group.
5
“Called-up share capital” has the meaning given in the 1985 Act or in the 1986 Order.
6
“High value trust” means a trust where the aggregate value of the cash and investments which form part of the trust’s assets (before deducting the amount of its liabilities) —
a
is £10 million or more; or
b
has been £10 million or more at anytime during the year immediately preceding the date on which the communication in question was first made or directed.
7
“Net assets” has the meaning given by section 264 of the 1985 Act or the equivalent provision of the 1986 Order.
Sophisticated investors
50
1
“Certified sophisticated investor”, in relation to any description of investment, means a person —
a
who has a current certificate in writing or other legible form signed by an authorised person to the effect that he is sufficiently knowledgeable to understand the risks associated with that description of investment; and
b
who has signed, within the period of twelve months ending with the day on which the communication is made, a statement in the following terms:
“I make this statement so that I am able to receive promotions which are exempt from the restrictions on financial promotion in the Financial Services and Markets Act 2000. The exemption relates to certified sophisticated investors and I declare that I qualify as such in relation to investments of the following kind [list them]. I accept that the contents of promotions and other material that I receive may not have been approved by an authorised person and that their content may not therefore be subject to controls which would apply if the promotion were made or approved by an authorised person. I am aware that it is open to me to seek advice from someone who specialises in advising on this kind of investment.”.
1A
The validity of a statement signed in accordance with paragraph (1)(b) is not affected by a defect in the wording of the statement, provided that the defect does not alter the statement’s meaning.
2
If the requirements of paragraph (3) are met, the financial promotion restriction does not apply to any communication which —
a
is made to a certified sophisticated investor;
b
does not invite or induce the recipient to engage in investment activity with the person who has signed the certificate referred to in paragraph (1)(a); and
c
relates only to a description of investment in respect of which that investor is certified.
3
The requirements of this paragraph are that the communication is accompanied by an indication —
a
that it is exempt from the general restriction (in section 21 of the Act) on the communication of invitations or inducements to engage in investment activity on the ground that it is made to a certified sophisticated investor;
b
of the requirements that must be met for a person to qualify as a certified sophisticated investor;
c
that the content of the communication has not been approved by an authorised person and that such approval is, unless this exemption or any other exemption applies, required by section 21 of the Act;
d
that reliance on the communication for the purpose of engaging in any investment activity may expose the individual to a significant risk of losing all of the property invested or of incurring additional liability;
e
that any person who is in any doubt about the investment to which the communication relates should consult an authorised person specialising in advising on investments of the kind in question.
4
For the purposes of paragraph (1)(a), a certificate is current if it is signed and dated not more than three years before the date on which the communication is made.
Self-certified sophisticated investors
50A
1
“Self-certified sophisticated investor” means an individual who has signed within the period of twelve months ending with the day on which the communication is made, a statement complying with Part II of Schedule 5.
2
The validity of a statement signed for the purposes of paragraph (1) is not affected by a defect in the form or wording of the statement, provided that the defect does not alter the statement’s meaning and that the words shown in bold type in Part II of Schedule 5 are so shown in the statement.
3
If the requirements of paragraphs (4) and (7) are met, the financial promotion restriction does not apply to any communication which —
a
is made to an individual whom the person making the communication believes on reasonable grounds to be a self-certified sophisticated investor; and
b
relates only to one or more investments falling within paragraph (8).
4
The requirements of this paragraph are that either the communication is accompanied by the giving of a warning in accordance with paragraphs (5) and (6) or where, because of the nature of the communication this is not reasonably practicable —
a
a warning in accordance with paragraph (5) is given to the recipient orally at the beginning of the communication together with an indication that he will receive the warning in legible form and that, before receipt of that warning, he should consider carefully any decision to engage in investment activity to which the communication relates; and
b
a warning in accordance with paragraphs (5) and (6) (d) to (h) is sent to the recipient of the communication within two business days of the day on which the communication is made.
5
The warning must be in the following terms —
The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.
.
But where a warning is sent pursuant to paragraph (4)(b), for the words “this promotion” in both places where they occur there must be substituted wording which clearly identifies the promotion which is the subject of the warning.
6
The warning must —
a
be given at the beginning of the communication;
b
precede any other written or pictorial matter;
c
be in a font size consistent with the text forming the remainder of the communication;
d
be indelible;
e
be legible;
f
be printed in black, bold type;
g
be surrounded by a black border which does not interfere with the text of the warning; and
h
not be hidden, obscured or interrupted by any other written or pictorial matter.
7
The requirements of this paragraph are that the communication is accompanied by an indication —
a
that it is exempt from the general restriction (in section 21 of the Act) on the communication of invitations or inducements to engage in investment activity on the ground that it is made to a self-certified sophisticated investor;
b
of the requirements that must be met for an individual to qualify as a self-certified sophisticated investor;
c
that any individual who is in any doubt about the investment to which the communication relates should consult an authorised person specialising in advising on investments of the kind in question.
8
An investment falls within this paragraph if —
a
it is an investment falling within paragraph 14 of Schedule 1 being stock or shares in an unlisted company;
b
it is an investment falling within paragraph 15 of Schedule l being an investment acknowledging the indebtedness of an unlisted company;
c
it is an investment falling within paragraph 17 or 18 of Schedule 1 conferring entitlement or rights with respect to investments falling within sub-paragraph (a) or (b);
d
it comprises units in a collective investment scheme being a scheme which invests wholly or predominantly in investments falling within sub-paragraph (a) or (b);
e
it is an investment falling within paragraph 21 of Schedule 1 being an option to acquire or dispose of an investment falling within sub-paragraph (a), (b) or (c);
f
it is an investment falling within paragraph 22 of Schedule 1 being rights under a contract for the sale of an investment falling within sub-paragraph (a), (b) or (c);
g
it is an investment falling within paragraph 23 of Schedule 1 being a contract relating to, or to fluctuations in value or price of, an investment falling within sub-paragraph (a), (b) or (c),
provided in each case that it is an investment under the terms of which the investor cannot incur a liability or obligation to pay or contribute more than he commits by way of investment.
9
“Business day” means any day except a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom.
Associations of high net worth or sophisticated investors
51
The financial promotion restriction does not apply to any non-real time communication or solicited real time communication which —
a
is made to an association, or to a member of an association, the membership of which the person making the communication believes on reasonable grounds comprises wholly or predominantly persons who are —
i
certified or self-certified high net worth individuals within the meaning of article 48;
ii
high net worth persons falling within article 49(2)(a) to (d);
iii
certified or self-certified sophisticated investors within the meaning of article 50 or 50A; and
b
relates only to an investment under the terms of which a person cannot incur a liability or obligation to pay or contribute more than he commits by way of investment.
Common interest group of a company
52
1
“Common interest group”, in relation to a company, means an identified group of persons who at the time the communication is made might reasonably be regarded as having an existing and common interest with each other and that company in —
a
the affairs of the company; and
b
what is done with the proceeds arising from any investment to which the communication relates.
2
If the requirements of paragraphs (3) and either (4) or (5) are met, the financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is made only to persons who are members of a common interest group of a company, or may reasonably be regarded as directed only at such persons; and
c
relates to investments falling within paragraph 14 or 15 of Schedule 1 which are issued, or to be issued, by that company.
3
The requirements of this paragraph are that the communication is accompanied by an indication —
a
that the directors of the company (or its promoters named in the communication) have taken all reasonable care to ensure that every statement of fact or opinion included in the communication is true and not misleading given the form and context in which it appears;
b
that the directors of the company (or its promoters named in the communication) have not limited their liability with respect to the communication; and
c
that any person who is in any doubt about the investment to which the communication relates should consult an authorised person specialising in advising on investments of the kind in question.
4
The requirements of this paragraph are that the communication is accompanied by an indication —
a
that the directors of the company (or its promoters named in the communication) have taken all reasonable care to ensure that any person belonging to the common interest group (and his professional advisers) can have access, at all reasonable times, to all the information that he or they would reasonably require, and reasonably expect to find, for the purpose of making an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the company and of the rights attaching to the investments in question; and
b
describing the means by which such information can be accessed.
5
The requirements of this paragraph are that the communication is accompanied by an indication that any person considering subscribing for the investments in question should regard any subscription as made primarily to assist the furtherance of the company’s objectives (other than any purely financial objectives) and only secondarily, if at all, as an investment.
6
For the purposes of paragraph (2)(b) —
a
if all the conditions set out in paragraph (7) are met, the communication is to be regarded as directed at persons who are members of the common interest group;
b
in any other case in which one or more of those conditions are met, that fact shall be taken into account in determining whether the communication is directed at persons who are members of the common interest group (but a communication may still be regarded as directed only at such persons even if none of the conditions in paragraph (7) is met).
7
The conditions are that —
a
the communication is accompanied by an indication that it is directed at persons who are members of the common interest group and that any investment or activity to which it relates is available only to such persons;
b
the communication is accompanied by an indication that it must not be acted upon by persons who are not members of the common interest group;
c
there are in place proper systems and procedures to prevent recipients other than members of the common interest group engaging in the investment activity to which the communication relates with the person directing the communication, a close relative of his or a member of the same group.
8
Persons are not to be regarded as having an interest of the kind described in paragraph (1) if the only reason why they would be so regarded is that —
a
they will have such an interest if they become members or creditors of the company;
b
they all carry on a particular trade or profession; or
c
they are persons with whom the company has an existing business relationship, whether by being its clients, customers, contractors, suppliers or otherwise.
Settlors, trustees and personal representatives
53
The financial promotion restriction does not apply to any communication which is made between —
a
a person when acting as a settlor or grantor of a trust, a trustee or a personal representative; and
b
a trustee of the trust, a fellow trustee or a fellow personal representative (as the case may be),
if the communication is made for the purposes of the trust or estate.
Beneficiaries of trust, will or intestacy
54
The financial promotion restriction does not apply to any communication which is made —
a
between a person when acting as a settlor or grantor of a trust, trustee or personal representative and a beneficiary under the trust, will or intestacy; or
b
between a beneficiary under a trust, will or intestacy and another beneficiary under the same trust, will or intestacy,
if the communication relates to the management or distribution of that trust fund or estate.
Communications by members of professions
55
1
The financial promotion restriction does not apply to a real time communication (whether solicited or unsolicited) which —
a
is made by a person (“P”) who carries on a regulated activity to which the general prohibition does not apply by virtue of section 327 of the Act; and
b
is made to a recipient who has, prior to the communication being made, engaged P to provide professional services,
where the controlled activity to which the communication relates is an excluded activity which would be undertaken by P for the purposes of, and incidental to, the provision by him of professional services to or at the request of the recipient.
2
“Professional services” has the meaning given in section 327 of the Act.
3
An “excluded activity” is an activity to which the general prohibition would apply but for the application of —
a
section 327 of the Act; or
b
article 67 of the Regulated Activities Order.
Non-real time communication by members of professions
55A
1
The financial promotion restriction does not apply to a non-real time communication which is —
a
made by a person (“P”) who carries on Part XX activities; and
b
limited to what is required or permitted by paragraphs (2) and (3).
2
The communication must be in the following terms —
This [firm/company] is not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services to clients because we are members of [relevant designated professional body]. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.
3
The communication may in addition set out the Part XX activities which P is able to offer to his clients, provided it is clear that these are the investment services to which the statement in paragraph (2) relates.
4
The validity of a communication made in accordance with paragraph (2) is not affected by a defect in the wording of it provided that the defect does not alter the communication’s meaning.
5
“Part XX activities” means the regulated activities to which the general prohibition does not apply when they are carried on by P by virtue of section 327 of the Act.
Remedy following report by Parliamentary Commissioner for Administration
56
The financial promotion restriction does not apply to any communication made or directed by a person for the purpose of enabling any injustice, stated by the Parliamentary Commissioner for Administration in a report under section 10 of the Parliamentary Commissioner Act 1967 to have occurred, to be remedied with respect to the recipient.
Persons placing promotional material in particular publications
57
The financial promotion restriction does not apply to any communication received by a person who receives the publication in which the communication is contained because he has himself placed an advertisement in that publication.
Acquisition of interest in premises run by management companies
58
1
“Management company” means a company established for the purpose of —
a
managing the common parts or fabric of premises used for residential or business purposes; or
b
supplying services to such premises.
2
The financial promotion restriction does not apply to any non-real time communication or solicited real time communication if it relates to an investment falling within paragraph 14 of Schedule 1 which —
a
is issued, or to be issued, by a management company; and
b
is to be acquired by any person in connection with the acquisition of an interest in the premises in question.
Annual accounts and directors' report
59
1
If the requirements in paragraphs (2) to (5) are met, the financial promotion restriction does not apply to any communication by a body corporate (other than an open-ended investment company) which —
a
consists of, or is accompanied by, the whole or any part of the annual accounts of a body corporate (other than an open-ended investment company); or
b
is accompanied by any report which is prepared and approved by the directors of such a body corporate under —
i
sections 234 and 234A of the 1985 Act ;
ii
the corresponding Northern Ireland enactment; or
iii
the law of an EEA State other than the United Kingdom which corresponds to the provisions mentioned in paragraph (i) or (ii).
2
The requirements of this paragraph are that the communication —
a
does not contain any invitation to persons to underwrite, subscribe for, or otherwise acquire or dispose of, a controlled investment; and
b
does not advise persons to engage in any of the activities within sub-paragraph (a).
3
The requirements of this paragraph are that the communication does not contain any invitation to persons to —
a
effect any transaction with the body corporate (or with any named person) in the course of that body’s (or person's) carrying on of any activity falling within any of paragraphs 3 to 11 of Schedule 1; or
b
make use of any services provided by that body corporate (or by any named person) in the course of carrying on such activity.
4
The requirements of this paragraph are that the communication does not contain any inducement relating to an investment other than one issued, or to be issued, by the body corporate (or another body corporate in the same group) which falls within —
a
paragraph 14 or 15 of Schedule 1; or
b
paragraph 17 or 18 of that Schedule, so far as relating to any investments within sub-paragraph (a).
5
The requirements of this paragraph are that the communication does not contain any reference to —
a
the price at which investments issued by the body corporate have in the past been bought or sold; or
b
the yield on such investments,
unless it is also accompanied by an indication that past performance cannot be relied on as a guide to future performance.
6
For the purposes of paragraph (5)(b), a reference, in relation to an investment, to earnings, dividend or nominal rate of interest payable shall not be taken to be a reference to the yield on the investment.
7
“Annual accounts” means —
a
accounts produced by virtue of Part VII of the 1985 Act (or of that Part as applied by virtue of any other enactment);
b
accounts produced by virtue of the corresponding Northern Ireland enactment (or of that enactment as applied by virtue of any other enactment);
c
a summary financial statement prepared under section 251 of the 1985 Act ;
d
accounts delivered to the registrar under Chapter II of Part XXIII of the 1985 Act ;
e
accounts which are produced or published by virtue of the law of an EEA State other than the United Kingdom and which correspond to accounts within any of sub-paragraphs (a) to (d).
Participation in employee share schemes
60
1
The financial promotion restriction does not apply to any communication by a person (“C”), a member of the same group as C or a relevant trustee where the communication is for the purposes of an employee share scheme and relates to any of the following investments issued, or to be issued, by C —
a
investments falling within paragraph 14 or 15 of Schedule 1;
b
investments falling within paragraph 17 or 18 so far as relating to any investments within sub-paragraph (a); or
c
investments falling within paragraph 21 or 27 so far as relating to any investments within sub-paragraph (a) or (b).
2
“Employee share scheme”, in relation to any investments issued by C, means arrangements made or to be made by C or by a person in the same group as C to enable or facilitate —
a
transactions in the investments specified in paragraphs (1)(a) or (b) between or for the benefit of —
i
the bona fide employees or former employees of C or of another member of the same group as C;
ii
the wives, husbands, widows, widowers or children or step-children under the age of eighteen of such employees or former employees; or
b
the holding of those investments by, or for the benefit of, such persons.
3
“Relevant trustee” means a person who, in pursuance of an actual or proposed employee share scheme, holds as trustee or will hold as trustee investments issued by C.
Sale of goods and supply of services
61
1
In this article —
“supplier” means a person whose main business is to sell goods or supply services and not to carry on controlled activities falling within any of paragraphs 3 to 7 of Schedule 1 and, where the supplier is a member of a group, also means any other member of that group;
“customer” means a person, other than an individual, to whom a supplier sells goods or supplies services, or agrees to do so, and, where the customer is a member of a group, also means any other member of that group;
“a related sale or supply” means a sale of goods or supply of services to the customer otherwise than by the supplier, but for or in connection with the same purpose as the sale or supply mentioned above.
2
The financial promotion restriction does not apply to any non-real time communication or any solicited real time communication made by a supplier to a customer of his for the purposes of, or in connection with, the sale of goods or supply of services or a related sale or supply.
3
But the exemption in paragraph (2) does not apply if the communication relates to —
a
a qualifying contract of insurance or units in a collective investment scheme; or
b
investments falling within paragraph 27 of Schedule 1 so far as relating to investments within paragraph (a).
Sale of body corporate
62
1
The financial promotion restriction does not apply to any communication by, or on behalf of, a body corporate, a partnership, a single individual or a group of connected individuals which relates to a transaction falling within paragraph (2).
2
A transaction falls within this paragraph if —
a
it is one to acquire or dispose of shares in a body corporate other than an open-ended investment company, or is entered into for the purposes of such an acquisition or disposal; and
b
either —
i
the conditions set out in paragraph (3) are met; or
ii
those conditions are not met, but the object of the transaction may nevertheless reasonably be regarded as being the acquisition of day to day control of the affairs of the body corporate.
3
The conditions mentioned in paragraph (2)(b) are that —
a
the shares consist of or include 50 per cent or more of the voting shares in the body corporate; or
b
the shares, together with any already held by the person acquiring them, consist of or include at least that percentage of such shares; and
c
in either case, the acquisition or disposal is, or is to be, between parties each of whom is a body corporate, a partnership, a single individual or a group of connected individuals.
4
“A group of connected individuals” means —
a
in relation to a party disposing of shares in a body corporate, a single group of persons each of whom is —
i
a director or manager of the body corporate;
ii
a close relative of any such director or manager; or
iii
a person acting as trustee for, or nominee of, any person falling within paragraph (i) or (ii); and
b
in relation to a party acquiring shares in a body corporate, a single group of of persons each of whom is —
i
a person who is or is to be a director or manager of the body corporate;
ii
a close relative of any such person; or
iii
a person acting as trustee for or nominee of any person falling within paragraph (i) or (ii).
5
“Voting shares” in relation to a body corporate, means shares carrying voting rights attributable to share capital which are exercisable in all circumstances at any general meeting of that body corporate.
Takeovers of relevant unlisted companies: interpretation
63
1
In this article and in articles 64, 65 and 66, a “relevant unlisted company”, in relation to a takeover offer, means a company which is an unlisted company at the time that the offer is made and which has been an unlisted company throughout the period of ten years immediately preceding the date of the offer.
2
In this article and in articles 64, 65 and 66, references to a takeover offer for a relevant unlisted company are references to an offer which meets the requirements of Part I of Schedule 4 and which is an offer —
a
for all the shares in, or all the shares comprised in the equity or non-equity share capital of, a relevant unlisted company (other than any shares already held by or on behalf of the person making the offer); or
b
for all the debentures of such a company (other than debentures already held by or on behalf of the person making the offer).
3
Shares in or debentures of an unlisted company are to be regarded as being held by or on behalf of the person making the offer if the person who holds them, or on whose behalf they are held, has agreed that an offer should not be made in respect of them.
Takeovers of relevant unlisted companies
64
1
If the requirements of paragraphs (2) and (3) are met, the financial promotion restriction does not apply to any communication which is communicated in connection with a takeover offer for a relevant unlisted company.
2
The requirements of this paragraph are that the communication is accompanied by the material listed in Part II of Schedule 4.
3
The requirements of this paragraph are that the material listed in Part III of Schedule 4 is available at a place in the United Kingdom at all times during normal office hours for inspection free of charge.
Takeovers of relevant unlisted companies: warrants etc.
65
The financial promotion restriction does not apply to any communication which —
a
is communicated at the same time as, or after, a takeover offer for a relevant unlisted company is made; and
b
relates to investments falling within paragraph 17 or 18 of Schedule 1 so far as relating to the shares in or debentures of the unlisted company which are the subject of the offer.
Takeovers of relevant unlisted companies: application forms
66
The financial promotion restriction does not apply to any communication made in connection with a takeover offer for a relevant unlisted company which is a form of application for —
a
shares in or debentures of the unlisted company; or
b
investments falling within paragraphs 17 or 18 of Schedule 1 so far as relating to the shares in or debentures of the company which are the subject of the offer.
Promotions required or permitted by market rules
67
1
The financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
relates to an investment which falls within any of paragraphs 14 to 18 of Schedule 1 and which is permitted to be traded or dealt in on a relevant market; and
c
is required or permitted to be communicated by —
i
the rules of the relevant market;
ii
a body which regulates the market; or
iii
a body which regulates offers or issues of investments to be traded on such a market.
2
“Relevant market” means a market which —
a
meets the criteria specified in Part I of Schedule 3; or
b
is specified in, or established under the rules of an exchange specified in, Part II or III of that Schedule.
Promotions in connection with admission to certain EEA markets
68
1
The financial promotion restriction does not apply to any communication —
a
which is a non-real time communication or a solicited real time communication;
b
which a relevant EEA market requires to be communicated before an investment can be admitted to trading on that market;
c
which, if it were included in a prospectus issued in accordance with prospectus rules made under Part VI of the Act, would be required to be communicated by those rules; and
d
which is not accompanied by any information other than information which is required or permitted to be published by the rules of that market.
2
In this article “relevant EEA market” means any market on which investments can be traded or dealt in and which —
a
meets the criteria specified in Part I of Schedule 3; or
b
is specified in, or established under the rules of an exchange specified in, Part II of that Schedule.
Promotions of securities already admitted to certain markets
69
1
In this article —
“relevant investment” means any investment falling within —
paragraph 14 or 15 of Schedule 1; or
paragraph 17 or 18 of that Schedule so far as relating to any investment mentioned in sub-paragraph (a);
“relevant market” means any market on which investments can be traded and which —
meets the criteria specified in Part I of Schedule 3; or
is specified in, or established under, the rules of an exchange specified in, Part II or III of that Schedule.
2
If the requirements of paragraph (3) are met, the financial promotion restriction does not apply to any communication which —
a
is a non-real time communication or a solicited real time communication;
b
is communicated by a body corporate (“A”), other than an open-ended investment company; and
c
relates only to relevant investments issued, or to be issued, by A or by another body corporate in the same group,
if relevant investments issued by A or by any such body corporate are permitted to be traded on a relevant market.
3
The requirements of this paragraph are that the communication —
a
is not, and is not accompanied by, an invitation to engage in investment activity;
b
is not, and is not accompanied by, an inducement relating to an investment other than one issued, or to be issued, by A (or another body corporate in the same group);
c
is not, and is not accompanied by, an inducement relating to a relevant investment which refers to —
i
the price at which relevant investments have been bought or sold in the past, or
ii
the yield on such investments,
unless the inducement also contains an indication that past performance cannot be relied on as a guide to future performance.
4
For the purposes of this article, an investment falling within paragraph 17 or 18 of Schedule 1 is treated as issued by the person (“P”) who issued the investment in respect of which the investment confers rights if it is issued by —
a
an undertaking in the same group as P; or
b
a person acting on behalf of, or pursuant to, arrangements made with P.
5
For the purposes of paragraph (3)(a), “engaging in investment activity” has the meaning given in section 21(8) of the Act; and for the purposes of paragraph (3)(c)(ii), a reference, in relation to an investment, to earnings, dividend or nominal rate of interest payable shall not be taken to be a reference to the yield on the investment.
Promotions included in listing particulars etc.
70
1
The financial promotion restriction does not apply to any non-real time communication which is included in —
a
listing particulars;
b
supplementary listing particulars;
c
a prospectus or supplementary prospectus approved in accordance with prospectus rules made under Part VI of the Act; or
d
any other document required or permitted to be published by listing rules or prospectus rules under Part VI of the Act (except an advertisement within the meaning of the prospectus directive).
2
In this article “listing particulars”, “listing rules”, “the prospectus directive” and “prospectus rules” have the meaning given by Part VI of the Act.
Material relating to prospectus for public offer of unlisted securities
71
1
The financial promotion restriction does not apply to any non-real time communication relating to a prospectus or supplementary prospectus where the only reason for considering it to be an invitation or inducement is that it does one or more of the following —
a
it states the name and address of the person by whom the transferable securities to which the prospectus or supplementary prospectus relates are to be offered;
b
it gives other details for contacting that person;
c
it states the nature and the nominal value of the transferable securities to which the prospectus or supplementary prospectus relates, the number offered and the price at which they are offered;
d
it states that a prospectus or supplementary prospectus is or will be available (and, if it is not yet available, when it is expected to be);
e
it gives instructions for obtaining a copy of the prospectus or supplementary prospectus.
2
In this article —
a
“transferable securities” has the same meaning as in section 102A(3) of the Act;
b
references to a prospectus or supplementary prospectus are references to a prospectus or supplementary prospectus which is published in accordance with prospectus rules made under Part VI of the Act.
Pension products offered by employers
72
1
If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any communication which is made by an employer to an employee in relation to a group personal pension scheme or a stakeholder pension scheme.
2
The requirements of this paragraph are that —
a
the employer will make a contribution to the group personal pension scheme or stakeholder pension scheme to which the communication relates in the event of the employee becoming a member of the scheme and the communication contains a statement informing the employee of this;
b
the employer has not received, and will not receive, any direct financial benefit from the scheme;
c
the employer notifies the employee in writing prior to the employee becoming a member of the scheme of the amount of the contribution that the employer will make to the scheme in respect of that employee; and
d
in the case of a non-real time communication, the communication contains, or is accompanied by, a statement informing the employee of his right to seek advice from an authorised person or an appointed representative.
3
For the purposes of paragraph (2)(b) “direct financial benefit” includes —
a
any commission paid to the employer by the provider of the scheme; and
b
any reduction in the amount of the premium payable by the employer in respect of any insurance policy issued to the employer by the provider of the scheme.
4
In this article —
“group personal pension scheme” means arrangements administered on a group basis under a personal pension scheme and which are available to employees of the same employer or of employers within a group;
“personal pension scheme” means a personal pension scheme as defined in section 1 of the Pension Schemes Act 1993 and which has been approved by the Commissioners of Inland Revenue under Chapter XIV of the Income and Corporation Taxes Act 1988 ;
“stakeholder pension scheme” has the meaning given by section 1 of the Welfare Reform and Pensions Act 1999 .
Advice centres
73
1
If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any communication which is made by a person in the course of carrying out his duties as an adviser for, or employee of, an advice centre.
2
The requirements of this paragraph are that the communication relates to —
a
qualifying credit;
b
rights under, or rights to or interests in rights under, qualifying contracts of insurance; or
c
a child trust fund.
3
In this article —
“adequate professional indemnity insurance”, in relation to an advice centre, means insurance providing cover that is adequate having regard to —
the claims record of the centre;
the financial resources of the centre; and
the right of clients of the centre to be compensated for loss arising from the negligent provision of financial advice;
“advice centre” means a body which —
gives advice which is free and in respect of which the centre does not receive any fee, commission or other reward;
provides debt advice as its principal financial services activity; and
in the case of a body which is not part of a local authority, holds adequate professional indemnity insurance or a guarantee providing comparable cover;
“child trust fund” has the meaning given by section 1(2) of the Child Trust Funds Act 2004 ;
“local authority” has the meaning given in article 2 of the Financial Services and Markets Act 2000 (Exemption) Order 2001 .
Revocation
74
The Orders specified in the first column of Schedule 6 are revoked to the extent specified in the third column of that Schedule.
Jean Ryan
Tom Watson
Two of the Lords Commissioners of Her Majesty’s Treasury
8th June 2005