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AUTH App 1.27 Advice to be given to persons in their capacity as investors (on the merits of their investing as principal or agent)

AUTH App 1.27.1G

For the purposes of article 53, advice must be given to or directed at someone who either holds investments or is a prospective investor (or their agent). Where the investment is a risk only contract of insurance such as house contents insurance, the policyholder or prospective policyholder is regarded as an investor.1

AUTH App 1.27.2G

Article 53 does not apply where the advice is given to persons who receive it as:

  1. (1)

    an adviser who may use it to inform advice given by him to persons for whom he does not act as agent;

  2. (2)

    a journalist or broadcaster; or

  3. (3)

    an employer (for example, on setting up a pension scheme).

AUTH App 1.27.3G

Article 53 does not apply to advice given to a person (such as an independent financial adviser) who is acting as an agent for an investor if it does not relate to a transaction into which the person is to enter as agent for the investor.

AUTH App 1.27.4G

Article 53 does apply where the recipient is someone who invests on behalf of other persons (whether as a principal or agent), such as:

  1. (1)

    a trustee or nominee; or

  2. (2)

    a discretionary fund manager; or

  3. (3)

    an attorney or anyone else who enters into investment transactions as agent for investors,

where he receives the advice in that capacity.

AUTH App 1.27.5G

Advice will still be covered by article 53 even though it may not be given to or directed at a particular investor (for example, advice given in a periodical publication or on a website). The expression 'investor' has a broad meaning and will include institutional or professional investors.