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AUTH App 1.23 Regulated activities

AUTH App 1.23.1 G

Under section 19 of the Act (The general prohibition) no person may, by way of business, carry on a regulated activity in the United Kingdom unless he is authorised or exempt. The meaning of regulated activity is set out in Part II of the Financial Services and Markets Act 2000 (RegulatedActivities) Order 2001 (the Regulated Activities Order) (as amended). Any person who breaches section 19 of the Act commits a criminal offence for which the maximum penalty is two years? imprisonment and an unlimited fine.

AUTH App 1.23.2 G

Anyone who is carrying on a regulated activity is likely to make financial promotions in the course of or for the purposes of carrying on that activity. It is beyond the scope of this guidance to cover regulated activities as such (for a general guide see AUTH 2). There are circumstances, however, where persons whose main aim is either :

  1. (1)

    to make financial promotions for their own purposes or on behalf of others; or

  2. (2)

    to help other persons to make financial promotions,

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.

AUTH App 1.23.3 G

The regulated activities which are likely to be conducted in the circumstances referred to in AUTH App 1.23.2 G are:

  1. (1)

    giving advice on certain investments (articles 53 (Advising on investments), 53A (Advising on regulated mortgage contracts) and 56 (Advice on syndicate participation at Lloyd's) of the Regulated Activities Order) - for example, where the financial promotion is the advice;1

  2. (2)

    making arrangements with a view to transactions in investments (article 25(1) of the Regulated Activities Order (Arranging deals in investments)) or making arrangements with a view to regulated mortgage contracts (Article 25A(2) of the Regulated Activities Order (Arranging regulated mortgage contracts) - for example, where the person concerned makes arrangements that are intended to lead to a transaction by a third party; and1

  3. (3)

    agreeing to carry on either (1) or (2) (article 64 of the Regulated Activities Order (Agreeing to carry on specified kinds of activity)).

AUTH App 1.23.4 G

1The guidance that follows is concerned with the regulated activities of making arrangements with a view to transactions in and advising on investments. Guidance on the regulated activities of making arrangements with a view to and advising on regulated mortgage contracts is in AUTH App 4 (Guidance on regulated activities connected with mortgages).