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

The following Financial Services practice note produced in partnership with Brown Rudnick provides comprehensive and up to date legal information covering:

  • Unauthorised business and enforcement powers of the FCA
  • Overview
  • 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
  • Collective investment schemes (CIS)
  • Boiler room fraud
  • Impact on customers of dealing with unauthorised firms
  • More...

Unauthorised business and enforcement powers of the FCA

Overview

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 FSMA 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. This Practice Note introduces how the Financial Conduct Authority (FCA) enforces against unauthorised business; further detail is provided in the following Practice Notes:

  1. Unauthorised business and the approach to enforcement—civil proceedings

  2. Unauthorised business and the approach to enforcement—criminal proceedings

In response to the exponential rise in online investment scams during the coronavirus (COVID-19) pandemic, the FCA’s director of enforcement and market oversight, Mark Steward, explained he was conscious that financial services firms are not thinking about unregulated activity; however, he warned ‘scams and fraud are something you should thing about’. He called on regulated firms to help the FCA create a ‘force field’ against unauthorised business marketing scam investments—for further information, see News Analysis: FCA Enforcement focuses on investment scams and other key takeaways from the 2021 City &

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