Breach of the financial promotion restriction and enforceability
Breach of the financial promotion restriction and enforceability

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Breach of the financial promotion restriction and enforceability
  • What is the financial promotion restriction?
  • What are the consequences for breaching of the financial promotion restriction?
  • Enforceability of agreements resulting from unlawful communications
  • FCA powers to withdraw financial promotions

What is the financial promotion restriction?

Under section 21 of the Financial Services and Markets Act 2000 (FSMA 2000), a person (A) must not, in the course of business, communicate an invitation or inducement (communicate includes causing a communication to be made) to engage in investment activity, the entering or offering to enter into an agreement the making or performance of which by either party constitutes a controlled activity, or the exercising of any rights conferred by a controlled investment to acquire a controlled investment. For more information about the financial promotion restriction, see Practice Note: The financial promotion regime—essentials.

What are the consequences for breaching of the financial promotion restriction?

Where a person breaches the financial promotion restriction, they are guilty of an offence and are liable:

  1. on summary conviction, to imprisonment for up to six months or a fine of up to the statutory maximum or both, or

  2. on conviction on indictment, to imprisonment for up to two years or an unlimited fine or both.

For more information about the statutory maximum, see Practice