PERG 8.1 Application and purpose

Application

PERG 8.1.1G

1This chapter 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.

PERG 8.1.1AG

1This chapter also applies to persons who need to know whether they are marketing an AIF.

Purpose of guidance

PERG 8.1.2G

The purpose of this guidance is three-fold:1

1
  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; and1

  3. (3)

    to provide guidance in relation to marketing an AIF.1

PERG 8.1.3G

In particular, this guidance covers:

  1. (1)

    invitations and inducements (see PERG 8.4);

  2. (2)

    meaning of 'in the course of business' (see PERG 8.5);

  3. (3)

    meaning of 'communicate' (see PERG 8.6);

  4. (4)

    meaning of 'engage in investment activity' (see PERG 8.7);

  5. (5)

    meaning of 'having an effect in the United Kingdom' (see PERG 8.8);

  6. (6)

    circumstances where the restriction in section 21 does not apply (see PERG 8.9);

  7. (7)

    types of financial promotion, including:

    1. (a)

      meaning of 'real time financial promotion' (see PERG 8.10.2 G); and

    2. (b)

      meaning of 'unsolicited real time financial promotion' (see PERG 8.10.8 G);

  8. (8)

    types of exemption under the Financial Promotion Order, including:

    1. (a)

      exemption for certain one-off promotions (see PERG 8.14.3 G);

    2. (b)

      exemption for financial promotions not directed at the United Kingdom (see PERG 8.12.2 G);

    3. (c)

      exemptions for financial promotions by journalists and in broadcasts (see PERG 8.12.23 G);

  9. (9)

    financial promotions concerning deposits and contracts of insurance other than life policies (see PERG 8.13);

  10. (10)

    financial promotions concerning promotions by members of the professions (see PERG 8.15);

  11. (11)

    financial promotions concerning funeral plans (see PERG 8.16);

  12. (12)

    financial promotions concerning the Lloyd’s market (see PERG 8.18);

  13. (13)

    additional restrictions on the promotion of:

    1. (a)

      life policies (see PERG 8.19);

    2. (b)

      collective investment schemes (see PERG 8.20);

  14. (14)

    company statements, announcements and briefings (see PERG 8.21);

  15. (15)

    financial promotions made on the Internet (see PERG 8.22);

  16. (16)

    regulated activities:

    1. (a)

      advising on investments (see PERG 8.24);

    2. (b)

      making arrangements with a view to transactions in investments (see PERG 8.32);

      1
  17. (17)

    the business test for regulated activities (see PERG 8.34); and1

  18. (18)

    the marketing of an AIF (see PERG 8.37).1

PERG 8.1.4G

This guidance is issued under section 139A of the Act. It represents the FCA'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 138D 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 2005 (SI 2005/1529) (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 FCA will proceed on the footing that the person has complied with the aspects of the requirement to which the guidance relates.