Statutory Instrument 1992 No. 813

The Financial Services Act 1986 (Investment Advertisements) (Exemptions) (No. 2) Order 1992

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© Crown Copyright 1992

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1992 No. 813

FINANCIAL SERVICES

The Financial Services Act 1986 (Investment Advertisements) (Exemptions) (No. 2) Order 1992

Laid before Parliament in draft

Whereas a draft of this Order has been approved by resolution of each House of Parliament in pursuance of section 58(5) of the Financial Services Act 1986^[1]:

Now, therefore, the Secretary of State, in exercise of the powers conferred on him by section 58(3)(d) of the Financial Services Act 1986 hereby makes the following Order:

Citation, commencement and interpretation
    1.—(1)  This Order may be cited as the Financial Services Act 1986 (Investment Advertisements) (Exemptions) (No. 2) Order 1992 and shall come into force on the day after the day on which it is made.

    (2)  In this Order-

"the Act" means the Financial Services Act 1986; and


"relevant EC market" means a market in a member State which is established under the rules of an investment exchange specified in Part I of Schedule 1 to this Order or which meets the criteria specified in Part II of that Schedule.

Advertisements directed at informing or influencing persons of a particular kind
    2.—(1)  Section 57 of the Act shall not apply to an investment advertisement to which it would, apart from this article, otherwise apply if the advertisement may reasonably be regarded as being directed at informing or influencing only persons who fall within any one or more of the following categories-
 (a) a government, local authority or public authority;
 (b) persons whose ordinary activities involve them, as principal or as agent, in acquiring, holding, managing or disposing of investments for the purposes of a business carried on by them or whom it is reasonable to expect will, as principal or agent, acquire, hold, manage or dispose of investments for the purposes of such a business;
 (c) persons whose ordinary business involves the giving of advice which may lead to another person acquiring or disposing of an investment or refraining from so doing; and

    (2)  For the purposes of paragraph (1) of this article-
 (a) the expression "government, local authority or public authority" has the meaning given in Note (1) to paragraph 3 of Schedule 1 to the Act; and
 (b) an advertisement may be regarded as directed at informing or influencing a person of a kind specified in paragraph (1) if it is addressed to some other person in his capacity as an employee of that person, and, for these purposes, employment includes employment otherwise than under a contract of service.

    3.—(1)  For the purposes of article 2 of this Order, each of the following is an indication that an advertisement is directed at informing or influencing persons of a kind specified in paragraph (1) of that article-
 (a) the advertisement expressly states that it is directed at persons of a kind specified in article 2(1) of this Order and that it would be imprudent for persons of any other kind to respond to it;
 (b) the advertisement expressly states that any investment or service to which it relates is available only to persons having professional experience in matters relating to investment;
 (c) the manner in which the advertisement is disseminated is such that it is unlikely to come to the attention of persons who are not professionally experienced in matters relating to investment; and
 (d) any invitation or information contained in the advertisement is unlikely to appeal to persons who do not have professional experience in matters relating to investment.

    (2)  None of the indications given in paragraph (1) above is to be taken as showing conclusively that an advertisement is directed as there mentioned and, equally, the fact that an advertisement contains none of those indications is not to be taken to indicate that it is not so directed.

    4.—(1)  For the purposes of article 2 of this Order, each of the following is an indication that an advertisement is directed at informing or influencing persons of a kind not specified in paragraph (1) of that article-
 (a) the advertisement concerns an investment which is likely to be of interest mainly to persons acting in their personal capacity;
 (b) the minimum amount which may be expended in order to enter into any transaction to which the advertisement relates is sufficiently small that it is unlikely to deter persons who do not have professional experience in matters relating to investment from responding to the advertisement; and
 (c) the advertisement is a direct offer advertisement within the meaning given to that expression for the purposes of the core rules for the conduct of investment business^[2].

    (2)  None of the indications given in paragraph (1) above is to be taken as showing conclusively that an advertisement is directed as there mentioned and, equally, the fact that an advertisement contains none of those indications is not to be taken to indicate that it is not so directed.

Advertisements required or permitted to be published by exchange or market rules
    5.    Section 57 of the Act shall not apply to any advertisement relating to any investment falling within any of paragraphs 1 to 5 of Schedule 1 to the Act which is permitted to be traded or dealt in on a relevant EC market or a market established under the rules of an investment exchange specified in Schedule 2 to this Order if the advertisement consists of or of any part of a document which is required or permitted to be published by the rules of the relevant market.

John Redwood

Minister of State, Department of Trade and Industry

13th March 1992

[1] 1986 c. 60. persons whose ordinary business involves making arrangements with a view to another person acquiring or disposing of investments. back

[2] The core rules for the conduct of investment business were made by the Securities and Investments Board, and published in January 1991. Advertisements by certain markets 6. Section 57 of the Act shall not apply to an investment advertisement which is issued or caused to be issued by a market which is a relevant EC market or is established under the rules of an investment exchange specified in Schedule 2 or 3 to this Order if the only reason why section 57 would otherwise apply to the advertisement is that it contains information which identifies a particular investment falling within paragraph 7, 8 or 9 of Schedule 1 to the Act as one which may be traded or dealt in on the market. back

Explanatory Note