The general prohibition and implications of its breach
The general prohibition and implications of its breach

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

  • The general prohibition and implications of its breach
  • The general prohibition
  • Authorised persons acting outside Part 4A permission
  • Contravention of the general prohibition and FSMA 2000, ss 20(1) and 20(1A)
  • False claims to be authorised or exempt
  • Enforceability of agreements

The general prohibition

Under section 19 of the Financial Services and Markets Act 2000 (FSMA 2000), a person cannot carry out regulated activities in the UK, or purport to do so, unless that person is authorised or exempt. This is known as the general prohibition. For information about the territorial scope of the general prohibition, see Practice Note: Territorial scope of the prohibition.

An authorised person is a person who:

  1. has been given permission by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) under FSMA 2000, Pt 4A to carry on certain regulated activities;

  2. is passporting its services into the UK under a EEA directive (eg the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II))

An exempt person is (in relation to the carrying on of a regulated activity) a person who is exempt from the general prohibition in respect of that activity as a result of being a person who:

  1. falls within the Financial Services and Markets Act 2000 (Exemption) Order 2001, SI 2001/1201

  2. is an appointed representative as defined in FSMA 2000, s 39

  3. falls within FSMA 2000, ss 285(2) or 285(3) (Exemption for recognised investment exchanges and clearing houses)

For more information about the requirements of becoming an appointed representative, see Practice Note: Appointed representatives.

'Regulated activities' are defined as including specified activities carried on