The financial promotion regime—essentials
The financial promotion regime—essentials

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

  • The financial promotion regime—essentials
  • What is the financial promotion regime?
  • Circumstances in which the financial promotion restriction does not apply
  • Territorial scope of the financial promotion restriction
  • Financial promotions: Invitation or inducement
  • Financial promotions: meaning of invitation
  • Financial promotions: meaning of inducement
  • Steps leading to an inducement and examples of inducements
  • Financial promotions: meaning of communicate and communication
  • Financial promotions: meaning of ‘in the course of business’
  • more

What is the financial promotion regime?

The term ‘financial promotion’ is not used in the Financial Services and Markets Act 2000 (FSMA 2000) other than in the title of section 21. Under FSMA 2000, s 21(1), 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, subject to the circumstance set out in Circumstances in which the financial promotion restriction does not apply below.

Engaging in investment activity means 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.

In addition, as a result of an amendment made by Financial Guidance and Claims Act 2018, the financial promotion restriction is extended to ‘engaging in claims management activities’ at a date yet to be appointed. Financial Conduct Authority (FCA) consultation paper CP18/15 Claims management: how we propose to regulate claims management companies indicates that the FCA becomes the regulator of claims management companies (CMCs) established or serving customers, in Great Britain (ie England, Wales and Scotland) on 1 April 2019. The 1 April 2019 date of transfer of regulation to the FCA is subject