Content Options

Content Options

View Options

AUTH App 1.1 Application and purpose


AUTH App 1.1.1G

1This appendix applies to persons who need to know whether their communications are subject to or comply with the Act. It also helps them decide whether their activities in making or helping others to make financial promotions are regulated activities.

Purpose of guidance

AUTH App 1.1.2G

The purpose of this guidance is two fold:

  1. (1)

    to outline the restriction on financial promotion under section 21 of the Act (Restrictions on financial promotion) and the main exemptions from this restriction; and

  2. (2)

    to outline the main circumstances in which persons who are primarily involved in making or helping others to make financial promotions may be conducting regulated activities requiring authorisation or exemption themselves; this part of the guidance may also be of more general relevance to persons who may be concerned whether or not they are carrying on the regulated activities of advising on investments or making arrangements with a view to transactions in investments.

AUTH App 1.1.3G

In particular, this guidance covers:

  1. (1)

    invitations and inducements (see AUTH App 1.4);

  2. (2)

    meaning of 'in the course of business' (see AUTH App 1.5);

  3. (3)

    meaning of 'communicate' (see AUTH App 1.6);

  4. (4)

    meaning of 'engage in investment activity' (see AUTH App 1.7);

  5. (5)

    meaning of 'having an effect in the United Kingdom' (see AUTH App 1.8);

  6. (6)

    circumstances where the restriction in section 21 does not apply (see AUTH App 1.9);

  7. (7)

    types of financial promotion, including:

    1. (a)

      meaning of 'real time financial promotion' (see AUTH App 1.10.2 G); and

    2. (b)

      meaning of 'unsolicited real time financial promotion' (see AUTH App 1.10.8 G);

  8. (8)

    types of exemption under the Financial Promotion Order, including:

    1. (a)

      exemption for certain one-off promotions (see AUTH App 1.14.3 G);

    2. (b)

      exemption for financial promotions not directed at the United Kingdom (see AUTH App 1.12.2 G);

    3. (c)

      exemptions for financial promotions by journalists and in broadcasts (see AUTH App 1.12.23 G);

  9. (9)

    financial promotions concerning deposits and contracts of insurance other than life policies (see AUTH App 1.13);

  10. (10)

    financial promotions concerning promotions by members of the professions (see AUTH App 1.15);

  11. (11)

    financial promotions concerning funeral plans (see AUTH App 1.16);

  12. (12)

    financial promotions concerning the Lloyd's market (see AUTH App 1.18);

  13. (13)

    additional restrictions on the promotion of:

    1. (a)

      life policies (see AUTH App 1.19);

    2. (b)

      collective investment schemes (see AUTH App 1.20);

  14. (14)

    company statements, announcements and briefings (see AUTH App 1.21);

  15. (15)

    financial promotions made on the Internet (see AUTH App 1.22);

  16. (16)

    regulated activities:

    1. (a)

      advising on investments (see AUTH App 1.24);

    2. (b)

      making arrangements with a view to transactions in investments (see AUTH App 1.32); and

  17. (17)

    the business test for regulated activities (see AUTH App 1.34).

AUTH App 1.1.4G

This guidance is issued under section 157 of the Act. It represents the FSA's views and does not bind the courts. For example, it would not bind the courts in an action for damages brought by a private person for breach of a rule (see section 150 of the Act (Actions for damages)), or in relation to the enforceability of a contract where there has been a breach of sections 19 (The general prohibition) or 21 (Restrictions on financial promotion) of the Act (see sections 26 to 30 of the Act (Enforceability of agreements)). Although the guidance does not bind the courts, it may be of persuasive effect for a court considering whether it would be just and equitable to allow a contract to be enforced (see sections 28(3) and 30(4) of the Act). Anyone reading this guidance should refer to the Act and to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (SI 2001/1335) (as amended) (the Financial Promotion Order) and the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) (as amended) (the Regulated Activities Order). These should be used to find out the precise scope and effect of any particular provision referred to in the guidance and any reader should consider seeking legal advice if doubt remains. If a person acts in line with the guidance in the circumstances mentioned by it, the FSA will proceed on the footing that the person has complied with the aspects of the requirement to which the guidance relates.