PERG 8
Financial promotion and related activities
PERG 8.1
Application and purpose
- 01/07/2005
Application
PERG 8.1.1
See Notes
- 01/07/2005
Purpose of guidance
PERG 8.1.2
See Notes
- 01/07/2005
PERG 8.1.3
See Notes
- 01/07/2005
PERG 8.1.4
See Notes
- 01/07/2005
PERG 8.2
Introduction
- 01/07/2005
PERG 8.2.1
See Notes
- 01/07/2005
PERG 8.2.2
See Notes
- 01/07/2005
PERG 8.2.3
See Notes
- 01/07/2005
PERG 8.2.4
See Notes
- 01/07/2005
PERG 8.2.5
See Notes
- 01/07/2005
PERG 8.2.6
See Notes
- 01/07/2005
PERG 8.2.7
See Notes
- 01/07/2005
PERG 8.2.8
See Notes
- 01/07/2005
PERG 8.3
Financial promotion
- 01/07/2005
PERG 8.3.1
See Notes
- 01/07/2005
PERG 8.3.2
See Notes
- 01/07/2005
PERG 8.3.3
See Notes
- 01/07/2005
PERG 8.3.4
See Notes
- 01/07/2005
PERG 8.3.5
See Notes
- 01/07/2005
PERG 8.4
Invitation or inducement
- 01/07/2005
Promotional element
PERG 8.4.1
See Notes
- 01/07/2005
PERG 8.4.2
See Notes
- 01/07/2005
PERG 8.4.3
See Notes
- 01/07/2005
PERG 8.4.4
See Notes
It follows that a communication which does not have any element of persuasion or incitement will not be an invitation or inducement under section 21.
- 01/07/2005
Invitations
PERG 8.4.5
See Notes
A communication may contain a statement that it is not an invitation. Such statements may be regarded as evidence that the communication is not an invitation unless its contents indicate otherwise.
- 01/07/2005
PERG 8.4.6
See Notes
- 01/07/2005
Inducements
PERG 8.4.7
See Notes
- 01/07/2005
PERG 8.4.8
See Notes
- 01/07/2005
Directory listings
PERG 8.4.9
See Notes
- 01/07/2005
Tombstone advertisements (announcements of a firm's past achievements)
PERG 8.4.10
See Notes
- 01/07/2005
Links to a website
PERG 8.4.11
See Notes
- 01/07/2005
Banner advertisements on a website
PERG 8.4.12
See Notes
- 01/07/2005
Publication or broadcast of prices of investments (historic or live)
PERG 8.4.13
See Notes
- 01/07/2005
Company statements and announcements and analyst briefings
PERG 8.4.14
See Notes
- 01/07/2005
Journalism
PERG 8.4.15
See Notes
- 01/07/2005
Performance tables
PERG 8.4.16
See Notes
- 01/07/2005
PERG 8.4.17
See Notes
- 01/07/2005
Decision Trees
PERG 8.4.18
See Notes
- 01/07/2005
Investment agreements, share purchase agreements and customer agreements
PERG 8.4.19
See Notes
- 01/07/2005
Image advertising
PERG 8.4.20
See Notes
- 01/07/2005
Advertisements which invite contact with the advertiser
PERG 8.4.21
See Notes
- 06/10/2007
Introductions
PERG 8.4.22
See Notes
- (1) Introductions may take many forms but typically involve an offer to make an introduction or action taken in response to an unsolicited request. An introduction may be an inducement if the introducer is actively seeking to persuade or incite the person he is introducing to do business with the person to whom the introduction is made. So it may fall under section 21 if its purpose is to lead to investment activity. For example, if a person answers the question 'do you or can you provide investment advice' with a simple 'no, but I can introduce you to someone who does', that may be an inducement. But, if so, it is likely to be an inducement to contact someone to find out information about his services rather than to engage in investment activity.
- (2) Where a person calls in to an office or branch of a company and asks to see 'the investment adviser', a person who responds merely by directing or showing the way is not making an inducement.
- (3) Neither would a person be making an inducement by responding to an enquiry with 'we do not provide investment services - you need to consult an authorised person' or words to that effect. That is provided he does not go on to seek to persuade or incite the enquirer to contact a particular authorised person for investment services.
- (4) But a person would be making an inducement to engage in investment activity if, for example, he seeks to persuade or incite persons to allow him to introduce them to a particular authorised person so that they may take advantage of the cheap dealing rates which that person offers.
- (5) Where introductions do amount to inducements under section 21 they may fall under the exemption for generic promotions (article 17 of the Financial Promotion Order) (see PERG 8.12.14 G). This will be the case provided the financial promotion does not identify any particular investment or person to whom introductions are to be made or identify the introducer as a person who carries on a regulated activity (typically of making arrangements with a view to transactions in investments under article 25(2) of the Regulated Activities Order - (see PERG 8.33 (Introducing)) or making arrangements with a view to regulated mortgage contracts under article 25A(2) of the Regulated Activities Order (see PERG 4.5 (Arranging regulated mortgage contracts)). It is most likely to apply where the financial promotion relates to deposits or contracts of insurance which are not contractually based investments.
- (6) The journalists' exemption in article 20 of the Financial Promotion Order (Communications by journalists) may be relevant where the introduction is made through or in a publication, broadcast or regularly updated news or information service (see PERG 8.12.23 G).
- (7) Article 15 (Introductions) may apply provided certain conditions are met (see PERG 8.12.11 G). In addition, article 28B (Real time communications: introductions) may apply where an introduction is a real time financial promotion about home finance transactions and home finance activities (see PERG 8.17.12 G).
- 06/04/2007
Distributors
PERG 8.4.23
See Notes
- 01/07/2005
Investment trading methods and training courses
PERG 8.4.24
See Notes
- 01/07/2005
Invitations to attend meetings or to receive telephone calls or visits
PERG 8.4.25
See Notes
- 01/07/2005
Explanation of terms
PERG 8.4.26
See Notes
- 01/07/2005
Enquiries about a person's status or intentions
PERG 8.4.27
See Notes
Enquiries of this or a similar kind will not amount to inducements to engage in investment activity unless they involve persuasion or incitement to do so. The enquiry may be accompanied by a brief statement of the reason why it is being made. This may, for example, include a reference to the type of investment to which any subsequent financial promotions would relate. Such initial enquiries may be followed up with an inducement but this fact alone will not turn the initial enquiry into a financial promotion. For example, an enquiry about whether a person is certified for the purposes of article 48 (Certified high net worth individuals), article 50 (Sophisticated investors) or article 50A (self-certified sophisticated investors) may, where the answer is positive, be followed by a financial promotion. That financial promotion can then rely on article 48, 50 or 50A as the case may be.
- 01/07/2005
Solicited and accompanying material
PERG 8.4.28
See Notes
- 01/07/2005
PERG 8.4.29
See Notes
- 01/07/2005
PERG 8.4.30
See Notes
- 01/07/2005
Telephone services
PERG 8.4.31
See Notes
- 01/07/2005
Personal illustrations
PERG 8.4.32
See Notes
- 01/07/2005
Instructions or guidance on how to invest
PERG 8.4.33
See Notes
- 01/07/2005
Communications by employers to their employees
PERG 8.4.34
See Notes
Communications which are intended to educate or give employees information with no element of persuasion or incitement will not be invitations or inducements under section 21. Employers may wish to give their employees investment material prepared and approved by an authorised person. This material may be given under cover of a communication from the employer. If so, the covering communication will not itself be an inducement if all it does is to refer employees to the material and explain what they should do if they wish to act on it, without seeking to persuade or incite them to act. Where the covering communication is itself a financial promotion it will need to be approved by an authorised person provided it is a non-real time financial promotion unless an exemption applies. If it is a real time financial promotion it cannot be approved (see, for example, COB 3.12.2 R ). In such cases, an exemption would need to apply. Where employee share schemes are concerned, the exemption in article 60 of the Financial Promotion Order (Participation in employee share schemes) is likely to apply to any financial promotions made by employers or members of their group. Where an employer's financial promotions relate to such things as company health or general insurance benefit packages, the exemptions in article 24 (Relevant insurance activity: non real time communications) or 26 (Relevant insurance activity: real time communications) of the Financial Promotion Order may apply. Employers who promote pension products to their employees will be able to use the exemption in article 72 (Pension products offered by employers)provided certain conditions are met. These conditions are explained in PERG 8.14.40A G(Pension products offered by employers (article 72)). Any financial promotion made by an employer for the purpose of meeting his obligations under the Welfare Reform and Pensions Act 1999 to offer his employees a stakeholder pension scheme should be able to use the exemption in article 29 (Communications required or authorised by enactments).
- 01/10/2005
PERG 8.5
In the course of business
- 01/07/2005
PERG 8.5.1
See Notes
- 01/07/2005
PERG 8.5.2
See Notes
- 01/07/2005
PERG 8.5.3
See Notes
- 01/07/2005
PERG 8.5.4
See Notes
- 01/07/2005
PERG 8.5.5
See Notes
- 01/07/2005
PERG 8.6
Communicate
- 01/07/2005
PERG 8.6.1
See Notes
- 01/07/2005
Persons who communicate or cause a communication
PERG 8.6.2
See Notes
- 01/07/2005
Persons who do not communicate or cause a communication
PERG 8.6.3
See Notes
- 01/07/2005
Need for an active step to communicate or cause a communication
PERG 8.6.4
See Notes
- 01/07/2005
PERG 8.6.5
See Notes
In other cases, persons of this kind may need to rely on the mere conduit exemption (see PERG 8.12.18 G).
- 01/07/2005
Website operators
PERG 8.6.6
See Notes
- 01/07/2005
Application of exemptions to persons causing a communication
PERG 8.6.7
See Notes
- 01/10/2005
PERG 8.6.7A
See Notes
- 01/10/2005
Application of exemptions to persons who communicate on behalf of others
PERG 8.6.8
See Notes
- 01/07/2005
Meaning of 'made to', 'directed at' and 'recipient'
PERG 8.6.9
See Notes
- 01/07/2005
PERG 8.6.10
See Notes
- 01/07/2005
PERG 8.7
Engage in investment activity
- 01/07/2005
PERG 8.7.1
See Notes
- 01/07/2005
PERG 8.7.2
See Notes
So, it is quite possible for a person to be carrying on a business in the United Kingdom for which he does not require authorisation because the business activity either is not connected with financial services or falls within one of the exclusions in the Regulated Activities Order but find that the restriction in section 21 applies to his communications. It should also be noted that e-money is not a controlled investment. This means that the restriction in section 21 does not apply to the communication of an invitation or inducement that concerns e-money. This is unless the communication is a financial promotion for some other reason.
- 01/07/2005
PERG 8.7.3
See Notes
- 01/07/2005
PERG 8.7.4
See Notes
This means that most invitations or inducements to exercise voting rights will not be financial promotions.
- 01/07/2005
PERG 8.7.5
See Notes
- 01/07/2005
PERG 8.8
Having an effect in the United Kingdom
- 01/07/2005
PERG 8.8.1
See Notes
- 01/07/2005
PERG 8.8.2
See Notes
- 01/07/2005
PERG 8.8.3
See Notes
- 01/10/2005
PERG 8.9
Circumstances where the restriction in section 21 does not apply
- 01/07/2005
PERG 8.9.1
See Notes
- 01/07/2005
PERG 8.9.2
See Notes
- 01/07/2005
PERG 8.9.3
See Notes
- 01/07/2005
PERG 8.9.4
See Notes
- 01/07/2005
PERG 8.9.5
See Notes
- 01/10/2005
PERG 8.10
Types of financial promotion
- 01/07/2005
PERG 8.10.1
See Notes
- 01/07/2005
Real time v non-real time financial promotions
PERG 8.10.2
See Notes
PERG 8.6.9 G explains the meaning of 'made to' and 'directed at'.
- 01/07/2005
PERG 8.10.3
See Notes
- 01/07/2005
PERG 8.10.4
See Notes
- 01/07/2005
PERG 8.10.5
See Notes
- 01/07/2005
PERG 8.10.6
See Notes
- 01/07/2005
PERG 8.10.7
See Notes
- 01/07/2005
Solicited v unsolicited real time financial promotions
PERG 8.10.8
See Notes
- 01/07/2005
PERG 8.10.9
See Notes
- 01/07/2005
PERG 8.10.10
See Notes
- 01/07/2005
PERG 8.10.11
See Notes
- 01/07/2005
PERG 8.10.12
See Notes
- 01/07/2005
PERG 8.10.13
See Notes
- 01/07/2005
PERG 8.10.14
See Notes
- 01/07/2005
PERG 8.11
Types of exemption under the Financial Promotion Order
- 01/07/2005
PERG 8.11.1
See Notes
- 01/07/2005
PERG 8.11.2
See Notes
- 01/07/2005
PERG 8.11.3
See Notes
- 01/10/2005
PERG 8.11.4
See Notes
- 01/07/2005
PERG 8.11.5
See Notes
- 01/07/2005
PERG 8.11.6
See Notes
- 01/10/2005
PERG 8.12
Exemptions applying to all controlled activities
- 01/07/2005
PERG 8.12.1
See Notes
- 01/07/2005
Financial promotions to overseas recipients (article 12)
PERG 8.12.2
See Notes
- 01/07/2005
PERG 8.12.3
See Notes
- 01/07/2005
PERG 8.12.4
See Notes
- 01/07/2005
PERG 8.12.5
See Notes
- 01/10/2005
PERG 8.12.6
See Notes
- 01/07/2005
PERG 8.12.7
See Notes
- 01/07/2005
PERG 8.12.8
See Notes
Where a financial promotion is also directed at such persons in the United Kingdom the conclusive conditions referred to in PERG 8.12.5G (1) to PERG 8.12.5G (2) and PERG 8.12.7G (1) to PERG 8.12.7G (2) should be read as if references to persons to whom the financial promotion may be made or directed included investment professionals or high net worth companies etc. PERG 8.11.4 G explains how article 12 may be combined with other exemptions.
- 01/10/2005
Financial promotions from customers and potential customers (article 13)
PERG 8.12.9
See Notes
- 01/07/2005
Follow up financial promotions (article 14)
PERG 8.12.10
See Notes
This exemption does not help in situations where the original financial promotion was made or directed under an exemption which did not require it to include any indications or information. However, it is likely that, in many cases where no indications or information are required, the exemption to which the earlier financial promotion applies would also apply to any follow up financial promotion. The requirement that the follow up financial promotion be made by the person who made or directed the earlier one would seem to prevent use of the exemption by someone acting on behalf of that person. However, the earlier financial promotion may have been made or directed by an individual in his capacity as an officer or employee of a company or a partner or employee of a partnership. If so, the exemption will be satisfied if the follow-up financial promotion is made by another employee, director or partner of the same company or partnership.
- 01/07/2005
Introductions (article 15)
PERG 8.12.11
See Notes
This exemption applies to any financial promotion that is made with a view to or for the purposes of introducing the recipient to certain kinds of person. These are authorised persons who carry on the controlled activity to which the financial promotion relates, or exempt persons where the financial promotion relates to a controlled activity that is also a regulated activity in relation to which he is an exempt person. This is subject to the requirement that:
- (1) the person making the financial promotion ('P') is not a close relative or group company of the authorised or exempt person;
- (2) P does not receive any financial reward for making the introduction other than from the recipient of the financial promotion; and
- (3) the recipient of the financial promotion has not, in his capacity as investor, sought advice from P or, if he has, P has declined to provide it and has recommended that he seek advice from an authorised person.
For the purposes of (2), it is the FSA's view that P may be viewed as not receiving any financial reward other than from the recipient where P treats any commission or other financial benefit received from third parties to whom introductions are made as belonging to and held to the order of the recipient. P cannot simply tell the recipient that P will receive commission. The position must be that the commission belongs to the recipient and must be paid to him unless he agrees to its being kept by P. Where this occurs, the payment may be seen to be received by P from the recipient. In the FSA's opinion, the condition would be satisfied by P paying over to the recipient any third party payment he receives. Otherwise, it would be satisfied by P informing the recipient of the sum and that he has the right to require that the sum to be paid to him. This would allow the sum to be used to offset fees due from the recipient for other services provided to him by P. This could take the form of an agreement between P and the recipient that sums received by P will be used to offset any other fees due to P from the recipient. This is provided that P informs the recipient of sums which P has received and of the fees which they have been used to offset. However, it does not allow P to keep third party payments by seeking the recipient's agreement through standard terms and conditions. Similarly, a mere notification to the recipient that a particular sum has been received coupled with a request to keep it does not satisfy the condition.
- 01/10/2005
Exempt persons (article 16)
PERG 8.12.12
See Notes
- 01/07/2005
PERG 8.12.13
See Notes
In addition, the financial promotion may only be made in the circumstances in which it could be made by the appointed representative'sprincipal under COB 3, ICOB 3 or MCOB 3. This ensures a level playing field as between employed and tied sales forces. This exemption may be of particular use to telephone sales agencies who will often need to be appointed representatives of investment product companies.
- 01/07/2005
Generic promotions (article 17)
PERG 8.12.14
See Notes
- 01/07/2005
PERG 8.12.15
See Notes
- 01/07/2005
PERG 8.12.16
See Notes
- 01/07/2005
PERG 8.12.17
See Notes
- 01/07/2005
Mere conduits (article 18 and 18A)
PERG 8.12.18
See Notes
- 01/10/2005
PERG 8.12.19
See Notes
- 01/07/2005
PERG 8.12.20
See Notes
- 01/10/2005
Investment professionals (article 19)
PERG 8.12.21
See Notes
This also includes persons acting in their capacity as directors, officers or employees of such persons.
- 01/07/2005
PERG 8.12.22
See Notes
- 01/07/2005
Journalists (article 20)
PERG 8.12.23
See Notes
- 01/07/2005
PERG 8.12.24
See Notes
- 01/07/2005
PERG 8.12.25
See Notes
In addition, the publication, service or broadcast must be one which satisfies the principal purpose test set out in article 54 of the Regulated Activities Order. This means that the principal purpose must not be to advise on or lead or enable persons to buy or sellsecurities or relevant investments. See PERG 7 for further guidance on this. Article 20 does not define what is meant by a person 'acting in the capacity of a journalist'. In the FSA's opinion, this expression has a potentially wide meaning. It will apply to anyone who writes for or contributes to a publication, service or broadcast. This includes experts or analysts who may be asked to contribute articles for a publication or website service or to offer their opinion in a broadcast.
- 01/10/2005
PERG 8.12.26
See Notes
- 01/07/2005
PERG 8.12.27
See Notes
- 01/10/2005
PERG 8.12.28
See Notes
- 01/07/2005
PERG 8.12.29
See Notes
- 01/07/2005
PERG 8.12.30
See Notes
- 01/07/2005
PERG 8.12.31
See Notes
- 01/07/2005
Promotion broadcast by company director etc (article 20A)
PERG 8.12.32
See Notes
- 01/10/2005
PERG 8.12.33
See Notes
- 01/07/2005
PERG 8.12.34
See Notes
The exemption applies where the financial promotion:
- (1) comprises words which are spoken by the director or employee and not broadcast, transmitted or displayed in writing; or
- (2) is displayed in writing only because it is part of an interactive dialogue to which the director or employee is a party and in the course of which he is expected to respond immediately to questions put by a recipient of the communication.
This is provided that the financial promotionis not part of an organised marketing campaign. PERG 8.14.4G (3) provides guidance on the meaning of an organised marketing campaign. In the context of article 20A, it is the FSA's view that an individual or isolated financial promotion will not represent or be part of an organised marketing campaign. However, a company representative may use a broadcast interview or webcast to encourage or incite viewers or listeners to acquire investments or investment services which are the subject of an advertising campaign being conducted at the same time. In such cases, any financial promotion contained in that interview or webcast will be part of an organised marketing campaign. Where this is the case, the company representative may be able to rely on other exemptions depending upon the subject matter of the financial promotion - see PERG 8.21.
- 01/07/2005
PERG 8.12.35
See Notes
- 01/07/2005
PERG 8.12.36
See Notes
- 01/07/2005
PERG 8.12.37
See Notes
- 01/07/2005
Incoming electronic commerce communications (article 20B)
PERG 8.12.38
See Notes
For the purposes of (3), a communication is unsolicited unless it is made in response to an express request from its recipient.
- 01/07/2005
PERG 8.13
Exemptions applying to financial promotions concerning deposits and certain contracts of insurance
- 01/07/2005
PERG 8.13.1
See Notes
- 01/10/2005
PERG 8.13.2
See Notes
- 01/07/2005
PERG 8.13.3
See Notes
- 01/07/2005
PERG 8.13.4
See Notes
- 01/07/2005
PERG 8.14
Other financial promotions
- 01/07/2005
PERG 8.14.1
See Notes
- 01/07/2005
PERG 8.14.2
See Notes
- 01/07/2005
One-off financial promotions (articles 28 and 28A)
PERG 8.14.3
See Notes
- 01/07/2005
PERG 8.14.4
See Notes
- 01/07/2005
PERG 8.14.5
See Notes
- 01/07/2005
PERG 8.14.6
See Notes
- 01/07/2005
PERG 8.14.7
See Notes
- 01/07/2005
PERG 8.14.8
See Notes
- 01/07/2005
PERG 8.14.9
See Notes
- 01/07/2005
PERG 8.14.10
See Notes
- 01/07/2005
PERG 8.14.11
See Notes
- 01/10/2005
PERG 8.14.12
See Notes
- 01/07/2005
PERG 8.14.13
See Notes
Whether or not it would be reasonable to believe that any person understands the risks associated with the investment activity covered in a financial promotion or would expect to be contacted about it must be judged on the particular circumstances. In the FSA's opinion, the exemption requires that the recipient has the required understanding of risk at the time the promotion is made to him. However, it would be reasonable to believe that a person understands the risk involved if:
- (1) he is understood to be a professional in relation to the investment activity to which the financial promotion relates; or
- (2) he is advised about the risks by a person who is professionally qualified to give such advice; or
- (3) he has a position in a company which it is reasonable to suppose would require him to have such an understanding (such as a person who is in charge of a company's treasury function).
In the FSA's opinion, a person such as the managing director or finance director of a company that is seeking venture capital may reasonably be regarded as expecting to be contacted by or on behalf of a potential investor.
- 01/07/2005
Overseas communicators (articles 30-33)
PERG 8.14.14
See Notes
- 01/07/2005
PERG 8.14.15
See Notes
- 01/07/2005
PERG 8.14.16
See Notes
- 01/07/2005
PERG 8.14.17
See Notes
- 01/07/2005
Nationals of EEA States other than the United Kingdom (article 36)
PERG 8.14.18
See Notes
- 01/07/2005
Joint enterprises (article 39)
PERG 8.14.19
See Notes
A joint enterprise means, in general terms, arrangements entered into by two or more persons for commercial purposes related to a business that they carry on. The business must not involve a controlled activity. The term 'participant' includes other members of a group of which a participant is a member.
- 01/07/2005
PERG 8.14.20
See Notes
This means that the sponsors or promoters of a company who arrange for private investors to become shareholders will not be setting up a joint enterprise simply because the company may intend to carry on a relevant business which is not a controlled activity. Examples of a joint enterprise include a special purpose company owned by the participants and set up to operate a commercial project or to hold property of some kind. The participants in joint enterprises of this kind would typically be businesses which are to undertake work on the project or property development and investment companies.
- 01/07/2005
Certified high net worth individuals (article 48)
PERG 8.14.21
See Notes
There is an additional requirement that the recipient must have no contingent liability so that the maximum he may lose is the amount he invests. The term 'unlisted company' is defined in article 3 of the Financial Promotion Order. This exemption is expected to be of help to unlisted companies seeking venture capital.
- 01/07/2005
PERG 8.14.22
See Notes
- 01/07/2005
PERG 8.14.23
See Notes
- 01/07/2005
PERG 8.14.24
See Notes
- 01/07/2005
High net worth companies, unincorporated associations and trusts (article 49)
PERG 8.14.25
See Notes
- 01/10/2005
PERG 8.14.26
See Notes
- 01/07/2005
Sophisticated investors (articles 50 and 50A)
PERG 8.14.26A
See Notes
- 01/07/2005
PERG 8.14.27
See Notes
The recipient must also have signed a statement in the terms in article 50(1)(b). The validity of the statement is not affected by a defect in its wording provided the defect does not alter its meaning. The exemption applies to all kinds of financial promotion made to a certified sophisticated investor. However, it does not, unlike articles 48 and 50A, provide for the communicator to have reasonable belief that the recipient is a certified sophisticated investor. The financial promotion must not invite or induce the recipient to engage in investment activity with the person who has signed the certificate. But it may invite or induce the recipient to engage in investment activity with an associate or group member of that person.
- 01/07/2005
PERG 8.14.28
See Notes
- 01/07/2005
PERG 8.14.28A
See Notes
- 01/07/2005
PERG 8.14.28B
See Notes
- 01/07/2005
PERG 8.14.28C
See Notes
- 01/07/2005
PERG 8.14.28D
See Notes
- 01/07/2005
Associations of high net worth or sophisticated investors (article 51)
PERG 8.14.29
See Notes
- (1) This exemption allows a non-real time or solicited real time financial promotion to be made to an association with a particular membership. Membership of this association must be reasonably believed to be wholly or predominantly made up of certified high net worth individuals, high net worth companies or unincorporated associations or trusts, or certified or self-certified sophisticated investors. The financial promotion must not relate to an investment under the terms of which a person can incur additional liability of more than his original investment. In each case, whether the membership of an association is predominantly made up of certified high net worth individuals, high net worth companies or unincorporated associations or trusts, or certified or self-certified sophisticated investors will be a question of fact. The exemption may be expected to be likely to apply, for example, to financial promotions to business angel networks.
- (2) The exemption extends to financial promotions made to persons who are members of an association with a particular membership and not simply to financial promotions made to the operator or secretariat of the association. It would appear that this includes members who are not themselves certified high net worth individuals, high net worth companies or unincorporated associations or trusts, or certified or self-certified sophisticated investors.
- 01/10/2005
Common interest group of a company (article 52)
PERG 8.14.30
See Notes
- 01/07/2005
PERG 8.14.31
See Notes
- 01/07/2005
PERG 8.14.32
See Notes
- 01/07/2005
PERG 8.14.33
See Notes
- 01/07/2005
PERG 8.14.34
See Notes
- 01/07/2005
Sale of body corporate (article 62)
PERG 8.14.35
See Notes
- 01/07/2005
PERG 8.14.36
See Notes
- 01/07/2005
PERG 8.14.37
See Notes
- 01/07/2005
PERG 8.14.38
See Notes
- 01/07/2005
PERG 8.14.39
See Notes
- 01/07/2005
PERG 8.14.40
See Notes
- 01/07/2005
Pension products offered by employers (article 72)
PERG 8.14.40A
See Notes
This exemption should enable employers to promote pension schemes to their employees without undue concern that they may be breaching the restriction in section 21 of the Act. PERG 8.4.34 G (Communications by employers to their employees) has further guidance about the application of section 21 to employers generally.
- 01/10/2005
Advice centres (article 73)
PERG 8.14.40B
See Notes
- 06/04/2007
PERG 8.14.40C
See Notes
This exemption should be of particular use to bodies such as Citizens Advice Bureaux.
- 01/10/2005
Other issues
PERG 8.14.41
See Notes
- 01/07/2005
PERG 8.14.42
See Notes
- 01/07/2005
PERG 8.15
Financial promotions by members of the professions (articles 55 and 55A)
- 01/07/2005
Real time financial promotions by professional firms
PERG 8.15.1
See Notes
- 01/07/2005
PERG 8.15.2
See Notes
- 01/07/2005
PERG 8.15.3
See Notes
The FSA considers that, to satisfy the condition in PERG 8.15.2G (2) that an activity be incidental to the provision of professional services, regulated activities cannot be a major part of the practice of the professional firm. The FSA also considers that the following further factors are relevant.
- (1) The scale of regulated activity in proportion to other professional services provided.
- (2) Whether and to what extent services that are regulated activities are held out as separate services.
- (3) The impression given of how the professional firm provides regulated activities, for example, through its advertising or other promotions of its services.
In the FSA's opinion, one consequence of this is that the professional firm cannot provide services which are regulated activities if they amount to a separate business to the provision of professional services. This does not, however, preclude the professional firm operating its professional business in a way which involves separate teams or departments one of which handles the regulated activities.
- 01/07/2005
PERG 8.15.4
See Notes
- 01/07/2005
Non-real time financial promotions by professional firms
PERG 8.15.5
See Notes
- 01/10/2005
PERG 8.15.6
See Notes
- 01/10/2005
PERG 8.15.7
See Notes
- 01/07/2005
PERG 8.16
Financial promotions concerning funeral plans
- 01/07/2005
PERG 8.16.1
See Notes
- 01/07/2005
PERG 8.17
Financial promotions concerning agreements for qualifying credit
- 01/07/2005
PERG 8.17.1
See Notes
- 06/04/2007
Introduction
PERG 8.17.1A
See Notes
- 06/04/2007
Controlled investment: agreement for qualifying credit
PERG 8.17.2
See Notes
- 01/07/2005
PERG 8.17.3
See Notes
- 01/07/2005
Controlled activities
PERG 8.17.4
See Notes
- 01/07/2005
PERG 8.17.5
See Notes
- 01/07/2005
PERG 8.17.6
See Notes
This means that invitations and inducements relating to the services of mortgage arrangers will potentially be within the scope of section 21 of the Act.
- 01/07/2005
PERG 8.17.7
See Notes
This means that invitations and inducements relating to the services of mortgage advisers will potentially be within the scope of Section 21 of the Act.
- 01/07/2005
PERG 8.17.8
See Notes
- 01/07/2005
Application of exemptions to financial promotions about agreements for qualifying credit
PERG 8.17.9
See Notes
- 06/04/2007
PERG 8.17.10
See Notes
- 01/07/2005
PERG 8.17.12
See Notes
- 06/04/2007
PERG 8.17.13
See Notes
- 01/07/2005
PERG 8.17.14
See Notes
- 01/07/2005
PERG 8.17.15
See Notes
- 01/07/2005
PERG 8.17.16
See Notes
- 01/07/2005
Interaction with the Consumer Credit Act
PERG 8.17.17
See Notes
- 01/07/2005
PERG 8.17.18
See Notes
Subject of advertising or promotion | FSMA regulated | CCA regulated | |
(1) | regulated mortgage contracts | Yes | No |
(2) | other loans secured on land where the lender also enters into regulated mortgage contracts as lender | Yes | No |
(3) | loans not secured on land whether or not the lender also enters into regulated mortgage contracts as lender | No | Yes |
(4) | loans not secured on land but which form part of a loan product that is otherwise secured on land and where the lender enters into regulated mortgage contracts as lender | Yes | No |
(5) | loans as in (1), (2) or (4) but where the advertisement is subject to exemptions under the Financial Promotion Order other than article 17 (Generic promotions) | Yes | No |
(6) | loans as in (1), (2) or (4) but where the advertisement is exempt under article 17 of the Financial Promotion Order (Generic Promotions) | No | Yes |
(7) | loans with features as in (1), (2), (4) or (5) promoted in combination with other loans | Yes | Yes |
- 01/07/2005
PERG 8.17A
Financial promotions concerning insurance mediation activities
- 01/07/2005
PERG 8.17A.1
See Notes
- 01/07/2005
PERG 8.17A.2
See Notes
This means that an insurance intermediary will not be communicating a financial promotion:
- (1) where the only activity to which the promotion relates is assisting in the administration and performance of a contract of insurance; or
- (2) purely by reason of his inviting or inducing persons to make use of his advisory or arranging services where they relate only to general insurance contracts or pure protection contracts or both.
But as regards (2), an intermediary will be communicating a financial promotion if he is also inviting or inducing persons to enter into a contract of insurance. This is because the making and performance of the contract by the insurer will be a controlled activity (of effecting and carrying out a contract of insurance). Insurance intermediaries will, however, be able to use the exemptions in Part V of the Financial Promotion Order (see PERG 8.13 (Exemptions applying to financial promotions concerning deposits and certain contracts of insurance) where they promote a general insurance contract or a pure protection contract. Where an insurance intermediary is promoting life policies, he will be able to use any exemptions in Part VI of the Financial Promotion Order that apply to a contractually based investment.
- 01/07/2005
PERG 8.18
Financial promotions concerning the Lloyd's market
- 01/07/2005
PERG 8.18.1
See Notes
A person involved in insurance business written at Lloyd's may be making financial promotions when attracting another person:
- (1) to effect or carry out contracts of insurance written at Lloyd's (where the controlled activity which is the subject of the financial promotion is effecting and carrying out contracts of insurance); or
- (2) to have assets held under funds at Lloyd's (where the controlled activity may involve dealing in securities and contractually based investments, arranging deals in investments, managing investments or safeguarding and administering investments); or
- (3) to participate in particular syndicates at Lloyd's (where the controlled activity is advising on syndicate participation or arranging deals in syndicate participations or underwriting capacity); or
- (4) to participate indirectly in the Lloyd's market as a shareholder of a corporate underwriting member or a limited partner in a limited liability partnership which is an underwriting member (where the controlled activity is dealing in, arranging deals in or advising on shares or units); or
- (5) to take out insurance which is written at Lloyd's (where the controlled activity is effecting a contract of insurance).
- 01/07/2005
PERG 8.18.2
See Notes
- 01/07/2005
PERG 8.19
Additional restriction on the promotion of life policies
- 01/07/2005
PERG 8.19.1
See Notes
- 01/07/2005
PERG 8.20
Additional restriction on the promotion of collective investment schemes
- 01/07/2005
PERG 8.20.1
See Notes
- 01/07/2005
PERG 8.20.2
See Notes
In addition, section 240 of the Act (Restriction on approval of promotion) precludes an authorised person from approving a financial promotion for the purpose of section 21 if he would not be able to communicate it himself under section 238.
- 01/07/2005
PERG 8.20.3
See Notes
- 01/10/2005
PERG 8.20.4
See Notes
- 01/07/2005
PERG 8.21
Company statements, announcements and briefings
- 01/07/2005
PERG 8.21.1
See Notes
- 01/07/2005
PERG 8.21.2
See Notes
- 01/07/2005
PERG 8.21.3
See Notes
- 01/07/2005
Article 17: Generic promotions
PERG 8.21.4
See Notes
- 01/07/2005
Article 19: Investment professionals
PERG 8.21.5
See Notes
- 01/07/2005
Article 20A: Promotion broadcast by company director etc
PERG 8.21.6
See Notes
- 01/07/2005
Article 28 and 28A: One off promotions
PERG 8.21.7
See Notes
- 01/07/2005
Article 43: Members and creditors of certain bodies corporate
PERG 8.21.8
See Notes
Article 43 applies to non-real time and solicited real time financial promotions made by, or on behalf of, a company ('C') to persons who, in broad terms, are:
- (1) members or creditors of C or a group member of C ('G');
- (2) entitled to a relevant investment issued by C or G;
- (3) entitled to become a member of C or G;
- (4) entitled to have transferred to them title to a relevant investment issued by C or G.
The financial promotion must relate only to relevant investments issued or to be issued by C or G or, in certain circumstances, another person (see PERG 8.21.9G (2)). C and G must not be open-ended investment companies.
- 01/10/2005
PERG 8.21.9
See Notes
Article 43 allows a company to communicate a financial promotion to its shareholders about rights issues or a cash offer by a third party for their shares. It also allows a company to communicate with its creditors about restructuring debt obligations.
- 01/10/2005
Article 47: Persons in the business of disseminating information
PERG 8.21.10
See Notes
- 01/07/2005
Article 59: Annual accounts and directors' report
PERG 8.21.11
See Notes
In this respect, the FSA considers that the annual accounts (or part of them) or directors' report accompanies a financial promotion where it is made available to the recipients of the financial promotion at the same time. The financial promotion should refer to the accompanying material. For example, the accounts or report may be available on a company's website and referred to in a financial promotion on that website. Or they may be contained in or enclosed with a written communication (including an e-mail) or handed over during a meeting or discussion.
- 01/07/2005
PERG 8.21.12
See Notes
- 01/10/2005
Article 67: Promotions required or permitted by market rules
PERG 8.21.13
See Notes
- 01/07/2005
PERG 8.21.14
See Notes
- 01/07/2005
PERG 8.21.15
See Notes
- 01/07/2005
Article 68: Promotions in connection with admission to certain EEA markets
PERG 8.21.16
See Notes
- 01/10/2005
Article 69: Promotion of securities already admitted in certain markets
PERG 8.21.17
See Notes
- 01/10/2005
PERG 8.21.19
See Notes
- 01/10/2005
Article 70: Promotions included in listing particulars, etc
PERG 8.21.20
See Notes
The comments in PERG 8.21.14 G about when something is required or permitted to be published apply also to (4).
- 01/10/2005
General issues
PERG 8.21.21
See Notes
- 01/10/2005
PERG 8.22
The Internet
- 01/07/2005
PERG 8.22.1
See Notes
- 01/07/2005
PERG 8.22.2
See Notes
- 01/07/2005
PERG 8.22.3
See Notes
- 01/07/2005
PERG 8.23
Regulated activities
- 01/07/2005
PERG 8.23.1
See Notes
- 01/07/2005
PERG 8.23.2
See Notes
may find themselves conducting regulated activities. Such persons may typically include publishers or broadcasters, financial commentators, Internet service providers and website operators and telephone marketing companies.
- 01/07/2005
PERG 8.23.3
See Notes
- 06/04/2007
PERG 8.23.4
See Notes
- 06/04/2007
PERG 8.24
Advising on investments
- 01/07/2005
PERG 8.24.1
See Notes
- 01/07/2005
PERG 8.24.2
See Notes
- 01/07/2005
PERG 8.24.3
See Notes
- 01/07/2005
PERG 8.25
Advice must relate to an investment which is a security or contractually based investment
- 01/07/2005
PERG 8.25.1
See Notes
- 06/04/2007
PERG 8.25.2
See Notes
- 01/07/2005
PERG 8.26
The investment must be a particular investment
- 01/07/2005
PERG 8.26.1
See Notes
- 01/07/2005
PERG 8.26.2
See Notes
- 01/07/2005
PERG 8.26.3
See Notes
- 01/07/2005
PERG 8.26.4
See Notes
- 01/07/2005
PERG 8.27
Advice to be given to persons in their capacity as investors (on the merits of their investing as principal or agent)
- 01/07/2005
PERG 8.27.1
See Notes
- 01/07/2005
PERG 8.27.2
See Notes
- 01/07/2005
PERG 8.27.3
See Notes
- 01/07/2005
PERG 8.27.4
See Notes
where he receives the advice in that capacity.
- 01/07/2005
PERG 8.27.5
See Notes
- 01/07/2005
PERG 8.28
Advice or information
- 01/07/2005
PERG 8.28.1
See Notes
- 01/07/2005
PERG 8.28.2
See Notes
- 01/07/2005
PERG 8.28.3
See Notes
- 01/07/2005
PERG 8.28.4
See Notes
- 01/07/2005
PERG 8.29
Advice must relate to the merits (of buying or selling a particular investment)
- 01/07/2005
PERG 8.29.1
See Notes
- 01/07/2005
PERG 8.29.2
See Notes
- 01/07/2005
PERG 8.29.3
See Notes
- 01/07/2005
PERG 8.29.4
See Notes
- 01/07/2005
PERG 8.29.5
See Notes
- 01/07/2005
PERG 8.29.6
See Notes
- 01/07/2005
PERG 8.30
Medium used to give advice or information
- 01/07/2005
PERG 8.30.1
See Notes
- 01/07/2005
PERG 8.30.2
See Notes
- 01/07/2005
PERG 8.30.3
See Notes
- 01/07/2005
PERG 8.30.4
See Notes
- 01/07/2005
PERG 8.30.5
See Notes
- 01/07/2005
PERG 8.31
Exclusions for advising on investments
- 01/07/2005
PERG 8.31.1
See Notes
- 01/07/2005
PERG 8.31.2
See Notes
- 01/07/2005
PERG 8.31.3
See Notes
- 01/07/2005
PERG 8.31.4
See Notes
- 01/07/2005
PERG 8.31.5
See Notes
- 01/07/2005
PERG 8.32
Arranging deals in investments
- 01/07/2005
PERG 8.32.1
See Notes
- 01/07/2005
PERG 8.32.2
See Notes
- 01/07/2005
PERG 8.32.3
See Notes
- 01/07/2005
PERG 8.32.4
See Notes
- 01/07/2005
PERG 8.32.5
See Notes
- 01/07/2005
PERG 8.32.6
See Notes
- 01/07/2005
PERG 8.32.7
See Notes
- 01/07/2005
PERG 8.32.8
See Notes
- 01/07/2005
PERG 8.32.9
See Notes
- 01/07/2005
PERG 8.32.10
See Notes
the arrangements are liable to be made with a view to the company's client and its prospective customers buying or sellinginvestments. So such arrangements will be likely to fall within article 25(2) unless another exclusion applies (such as that for introductions - see PERG 8.33).
- 01/07/2005
PERG 8.32.11
See Notes
- 01/07/2005
PERG 8.32.12
See Notes
- 01/07/2005
PERG 8.33
Introducing
- 01/07/2005
PERG 8.33.1
See Notes
- 01/07/2005
PERG 8.33.2
See Notes
For article 29 to apply, it is also necessary that, in return for making the arrangements, A does not receive from any person other than the client financial reward or other advantage, for which he does not account to the client, arising out of his making the arrangements (PERG 8.12.11 G gives guidance on when a person will be regarded as having received reward from someone other than his client).
- 01/07/2005
PERG 8.33.3
See Notes
- 01/07/2005
PERG 8.33.4
See Notes
- 01/07/2005
PERG 8.33.5
See Notes
- 01/07/2005
PERG 8.33.6
See Notes
- 01/07/2005
PERG 8.34
The business test
- 01/07/2005
PERG 8.34.1
See Notes
- 01/07/2005
PERG 8.34.2
See Notes
- 01/07/2005
PERG 8.35
Authorisation and exemption
- 01/07/2005
PERG 8.35.1
See Notes
- 06/10/2007
PERG 8.36
Illustrative tables
- 01/07/2005
Financial Promotions: flowchart
PERG 8.36.1
See Notes
- 01/07/2005
Controlled activities and controlled investments
PERG 8.36.2
See Notes
- 01/07/2005
PERG 8.36.3
See Notes
1. | Accepting deposits |
2. | Effecting and carrying out contracts of insurance |
3. | Dealing in securities and contractually based investments |
4. | Arranging deals in investments |
5. | Managing investments |
6. | Safeguarding and administering investments |
7. | Advising on investments |
8. | Advising on syndicate participation at Lloyd's |
9. | Providing funeral plan contracts |
10. | Providing qualifying credit |
11. | Arranging qualifying credit etc |
12. | Advising on qualifying credit etc |
13. | Providing a home reversion plan |
14. | Arranging a home reversion plan |
15. | Advising on a home reversion plan |
16. | Providing a home purchase plan |
17. | Arranging a home purchase plan |
18. | Advising on a home purchase plan |
19. | Agreeing to do anything in 3 to 18 above |
- 06/04/2007
PERG 8.36.4
See Notes
1. | A deposit. |
2. | Rights under a contract of insurance. |
3. | Shares etc. |
4 | Instruments creating or acknowledging indebtedness (referred to in the Glossary as debentures) |
5. | Government and public securities. |
6. | Instruments giving entitlement to investments (referred to in the Glossary as warrants). |
7. | Certificates representing certain securities. |
8. | Units in a collective investment scheme. |
9. | Rights under a stakeholder pension scheme or a personal pension scheme. |
10. | Options. |
11. | Futures. |
12. | Contracts for differences etc. |
13. | Lloyd's syndicate capacity and syndicate membership. |
14. | Funeral plan contracts |
15. | Agreements for qualifying credit |
16. | Rights under a home reversion plan. |
17. | Rights under a home purchase plan. |
18. | Rights to or interests in anything falling under 1 to 14 above. |
- 06/04/2007
Application of exemptions to forms of financial promotion
PERG 8.36.5
See Notes
- 01/07/2005
PERG 8.36.6
See Notes
Financial Promotion Order | Applies to | |||
Article No. | Title and PERG 8 reference (where applicable) | Unsolicited real time | Solicited real time | Non-real time (solicited or unsolicited) |
12 | Communications to overseas recipients (8.12.2G) | *1 | * | * |
13 | Communications from customers and potential customers (8.12.9G) | * | * | * |
14 | Follow up non-real time communications and solicited real time communications (8.12.10G) | * | * | |
15 | Introductions (8.12.11G) | * | * | * |
16 | Exempt persons (8.12.12G) | *2 | *3 | *3 |
17 | Generic promotions (8.12.14G and 8.21.4G) | * | * | * |
17A | Communications caused to be made or directed by unauthorised persons (8.6.7AG) | * | * | * |
18 | Mere conduits (8.12.18G) | * | * | * |
18A | Outgoing electronic commerce communications: mere conduits, caching and hosting (8.12.18G) | * | * | * |
19 | Investment professionals (8.12.21G and 8.21.5G) | * | * | * |
20 | Communications by journalists (8.12.23G) | * | ||
20A | Promotion broadcast by company director etc (8.12.23G and 8.21.6G) | * | * | * |
20B | Incoming electronic commerce communications (8.12.38G) | * | * | * |
22 | Deposits : non-real time communications (8.13) | * | ||
23 | Deposits : real time communications (8.13) | * | * | |
24 | Relevant insurance activity : non-real time communications (8.13) | * | ||
25 | Relevant insurance activity : non-real time communications : reinsurance and large risks (8.13) | * | ||
26 | Relevant insurance activity : real time communications (8.13) | * | * | |
28 | One-off non-real time communications and solicited real time communications (8.14.3G) | * | * | |
28A | One-off unsolicited real time communications (8.14.11G) | * | ||
28B | Real time communications: introductions in connection with qualifying credit (8.17.12G) | * | * | |
29 | Communications required or authorised by enactments | * | * | * |
30 | Overseas communicators: solicited real time communications (8.14.15G) | * | ||
31 | Overseas communicators: non-real time communications to previously overseas customers (8.14.17G) | * | ||
32 | Overseas communicators: unsolicited real time communications to previously overseas customers (8.14.16G) | * | ||
33 | Overseas communicators: unsolicited real time communications to knowledgeable customers (8.14.16G) | * | ||
34 | Governments, central banks etc | * | * | |
35 | Industrial and provident societies | * | * | |
36 | Nationals of the EEA States other than United Kingdom (8.14.18G) | * | * | |
37 | Financial markets | * | * | |
38 | Persons in the business of placing promotional material | * | * | * |
39 | Joint enterprises (8.14.19G) | * | * | * |
40 | Participants in certain recognised collective investment schemes | * | * | |
41 | Bearer instruments: promotions required or permitted by market rules (8.14.42G) | * | * | |
42 | Bearer instruments: promotions to existing holders (8.14.42G) | * | * | |
43 | Members and creditors of certain bodies corporate (8.14.41G and 8.21.8G) | * | * | |
44 | Members and creditors of open-ended investment companies | * | * | |
45 | Group companies | * | * | * |
46 | Qualifying credit to bodies corporate (8.17.10G) | * | * | * |
47 | Persons in the business of disseminating information (8.21.10G) | * | * | * |
48 | Certified high net worth individuals (8.14.21G) | * | * | |
49 | High net worth companies, unincorporated associations etc (8.14.25G) | * | * | * |
50 | Sophisticated investors (8.14.27G) | * | * | * |
50A | Self-certified sophisticated investors {8.14.28AG) | * | * | |
51 | Associations of high net worth or sophisticated investors (8.14.29G) | * | * | |
52 | Common interest group of a company (8.14.30G) | * | * | |
53 | Settlors, trustees and personal representatives | * | * | * |
54 | Beneficiaries of trust, will or intestacy | * | * | * |
55 | Communications by members of professions (8.15.1G) | * | * | |
55A | Non-real time communication by members of the professions. (8.15.5G) | * | ||
56 | Remedy following report by Parliamentary Commissioner for Administration | * | * | * |
57 | Persons placing promotional material in particular publications | * | * | * |
58 | Acquisition of interest in premises run by management companies | * | * | |
59 | Annual accounts and directors' report (8.21.11G) | * | * | * |
60 | Participation in employee shares schemes | * | * | * |
61 | Sale of goods and supply of services | * | * | |
62 | Sale of body corporate (8.14.35G) | * | * | * |
64 | Takeovers of relevant unlisted companies | * | * | * |
65 | Takeovers of relevant unlisted companies: warrants etc | * | * | * |
66 | Takeovers of relevant unlisted companies: application forms | * | * | * |
67 | Promotions required or permitted by market rules (8.21.13G) | * | * | |
68 | Promotions in connection with admission to certain EEA markets (8.21.16G) | * | * | |
69 | Promotions of securities already admitted to certain markets (8.21.17G) | * | * | |
70 | Promotions included in listing particulars etc (8.21.20G) | * | ||
71 | Mxaterial relating to prospectus for public offer of unlisted securities | * | ||
72 | Pension products offered by employers (8.14.40A) | * | * | * |
73 | Advice centres (8.14.40B) | * | * | * |
1 in limited circumstances only - see article 12(2) of the Financial Promotion Order | ||||
2 for the purpose of article 16 (2) only | ||||
3 for the purpose of article 16 (1) only |
- 01/10/2005