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FINANCIAL PROMOTION:
THIRD CONSULTATION DOCUMENT
Financial Promotion of Collective Investment Schemes - First Consultation
OCTOBER
2000
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Annex A
Financial
Services and Markets Act 2000
Section
21
Financial Promotion
21.- (1) A person
(“A”) must not, in the course of business, communicate an
invitation or inducement to engage in investment activity.
(2) But subsection
(1) does not apply if-
(a) A is an authorised person; or
(b) the content
of the communication is approved for the purposesof
this section by an authorised person.
(3) In the case
of a communication originating outside the United Kingdom,
subsection (1) applies only if the communication is capable of having
an effect in the United Kingdom.
(4) The
Treasury may by order specify circumstances in which a person
is to be regarded for the purposes of subsection (1) as -
(a) acting in the course of business;
(b) not acting
in the course of business.
(5) The
Treasury may by order specify circumstances ( which may include
compliance with financial promotion rules) in which subsection (1)
does not apply.
(6) An order
under subsection (5) may, in particular, provide that subsection
(1) does not apply in relation to communications-
(a) of a specified description;
(b) originating
in a specified country or territory outside the United Kingdom;
(c) originating in a country or territory which falls within specified
description of country or territory outside the United Kingdom; or
(d)
originating outside the United Kingdom.
(7) The Treasury
may by order repeal subsection (3).
(8) “Engaging
in investment activity “ means -
(a) entering or offering to enter into an agreement the
making or performance of
which by either party constitutes a controlled activity; or
(b) exercising
any rights conferred by a controlled investment to acquire, dispose
of, underwrite or convert a controlled investment
(9) An activity
is a controlled activity if-
(a) it is an activity of a specified kind or one which falls
within a specified class of activity; and
(b) it relates
to an investment of a specified kind, or to one which falls within
a specified class or investment.
(10)
An investment is a controlled investment if it is an investment of a
specified kind or one which falls within a specified class of investment.
(11) Schedule
2 (except paragraph 26) applies for the purposes of subsections (9)
and (10) with references to section 22 being read as references to
each of those subsections.
(12) Nothing in
Schedule 2, as applied by subsection (11), limits the powers conferred
by subsection (9) or (10).
(13) “Communicate”
includes causing a communication to be made.
(14) “Investment”
includes any asset, right or interest.
(15) “Specified”
means specified in an order made by the Treasury.
Section 238
Restriction On
Promotion
238.-(1) An authorised
person must not communicate an invitation or inducement to
participate in a collective investment scheme.
(2) But that
is subject to the following provisions of this section and to section
239.
(3) Subsection
(1) applies in the case of a communication originating outside the United
Kingdom only if the communication is capable of having an effect in
the United Kingdom.
(4) Subsection
(1) does not apply in relation to -
(a) an authorised unit trust scheme;
(b) a scheme constituted
by an authorised open-ended investment company;or
(c) a recognised
scheme.
(5) Subsection
(1) does not apply to anything done in accordance with rules made
by the Authority for the purpose of exempting from that subsection
the promotion otherwise than to the general public of schemes of specified
descriptions.
(6) The Treasury
may by order specify circumstances in which subsection (1) does not
apply.
(7) An order under
subsection (6) may, in particular, provide that subsection (1) does
not apply in relation to communications-
(a) of a specified description;
(b) originating
in a specified country or territory outside the United Kingdom;
(c) originating
in a country or territory which falls within a specified
description of country or territory outside the United Kingdom; or
(d) originating
outside the United Kingdom.
(8) The Treasury
may by order repeal subsection(3).
(9) “Communicate”
includes causing a communication to be made.
(10) “Promotion
otherwise than to the general public” includes promotion in a way
designed to reduce, so far as possible, the risk of participation
by persons for whom participation would be unsuitable.
11) “Participate”,
in relation to a collective investment scheme, means become a participant
(within the meaning given by section 235 (2) in the scheme.
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