Q&As

Where a company wishes to make a financial promotion (in the form of equity to its shareholders) on behalf of a second set of shareholders, can the company communicate that financial promotion on behalf of its shareholders to the other shareholders?

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Published on LexisPSL on 16/12/2019

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • Where a company wishes to make a financial promotion (in the form of equity to its shareholders) on behalf of a second set of shareholders, can the company communicate that financial promotion on behalf of its shareholders to the other shareholders?

Where a company wishes to make a financial promotion (in the form of equity to its shareholders) on behalf of a second set of shareholders, can the company communicate that financial promotion on behalf of its shareholders to the other shareholders?

It is assumed that one set of shareholders wishes to purchase the shares of the other set of shareholders.

Refer to the Practice Note: Financial Promotion Order: Exemptions for corporate practice. Note that there is an exemption under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (FPO 2005), SI 2005/1529, art 43 which applies to non-real time communications and solicited real time communications (ie it does not apply to cold calls). It exempts communications a company makes to or directs at persons it reasonably believes to be its creditors, members and holders of other investments issued by it concerning its shares, debt instruments or entitlements to subscribe for any of them. This allows a company to communicate a financial promotion to its shareholders

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