Unauthorised business and enforcement powers of the FCA
Produced in partnership with BROWNRUDNICK
Unauthorised business and enforcement powers of the FCA

The following Financial Services guidance note Produced in partnership with BROWNRUDNICK provides comprehensive and up to date legal information covering:

  • Unauthorised business and enforcement powers of the FCA
  • Restrictions on unauthorised business
  • Agreements entered into in the course of unauthorised business
  • Restrictions on unlawful financial promotion
  • FCA powers in relation to unauthorised investment business
  • FCA powers in relation to persons knowingly concerned
  • Common examples of unauthorised investment business
  • Impact on customers of dealing with unauthorised firms
  • How to check if a firm is authorised

Restrictions on unauthorised business

The Financial Services and Markets Act 2000 (FSMA 2000) prohibits any person from carrying on a regulated activity in the UK unless they are an authorised or an exempt person. This is known as the general prohibition. A regulated activity is an activity of a specified kind (that is, one which is specified in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 which is carried on by way of business in the UK. A breach of the general prohibition is a criminal offence punishable by a fine or imprisonment. For more information on the General Prohibition please see Practice Note: The general prohibition and implications of its breach.

Agreements entered into in the course of unauthorised business

An agreement entered into by a person in the course of carrying out a regulated activity in contravention of the general prohibition (ie in the course of unauthorised business) is unenforceable against any other person and the other party to the agreement is entitled to recover any money or property paid or transferred under the agreement and compensation for any loss sustained as a result of having parted with the money or property. The court has the power where it is satisfied that it is just and equitable to allow an agreement