3. Regulated Activities (1)
• The ‘general prohibition’ under FSMA 2000:
> a person (individual or corporate body) may not carry out a
regulated activity in the UK unless authorised (by the FSA) or an
exemption applies
• Contravention is a criminal offence – up to 2 years in prison
and/or an unlimited fine
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4. Regulated Activities (2)
• Dealing in investments as principal or agent
• Arranging deals in investments
• Advising on investments
• Etc etc etc
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5. General exclusions
• Regulated Activities Order 2001
> Sets out circumstances where the general prohibition does not
apply
> E.g. the exclusion applicable to groups and joint enterprises
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6. Financial Promotion
Restriction
• A person (individual or body corporate) must not, in the
course of business, communicate an invitation or inducement
to engage in investment activity…
• …unless authorised by the FSA, the content of the
communication is approved by an authorised person or an
exemption applies
• Contravention is a criminal offence – up to 2 years in prison
and/or an unlimited fine
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7. Financial promotion:
exclusions
• Financial Promotion Order 2005
> Sets out exemptions to the financial promotion restriction e.g.
when the communication is made to certain recipients:
» Self certified sophisticated investors
» High net worth companies etc.
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8. FSA Opinion: August 2012
• “Many crowdfunding opportunities are high risk and complex”
• “We believe that crowd funding should be targeted at sophisticated
investors”
• “Almost all crowdfunds are not authorised by us and you will not have
access to the Financial Ombudsman Service (FOS) or Financial Services
Compensation Scheme (FSCS) if things go wrong”
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