Fair Trading Act 1973

Part I — Introductory

Director General of Fair Trading

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General functions of Director

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Consumer Protection Advisory Committee

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The Monopolies and Mergers Commission

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Principal functions of Commission

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Monopoly situation in relation to supply of goods

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Monopoly situation in relation to supply of services

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Monopoly situation in relation to exports

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Monopoly situation limited to part of United Kingdom

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Supplementary provisions relating to ss.6 to 9

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Meaning of "complex monopoly situation"

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Powers of Secretary of State in relation to functions of Director

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Part II — References to Consumer Protection Advisory Committee

General provisions

Meaning of "consumer trade practice"

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General provisions as to references to Advisory Committee

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Exclusion from s.14 in respect of certain services

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Restriction on references under s.14 in respect of certain goods and services

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Reference to Advisory Committee proposing recommendation to Secretary of State to make an order

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No such recommendation to be made except in pursuance of reference to which s.17 applies

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Scope of recommendation proposed in reference to which s.17 applies

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Time-limit and quorum for report on reference to which s.17 applies

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Report of Advisory Committee on reference to which s.17 applies

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Order in pursuance of report of Advisory Committee

Order of Secretary of State in pursuance of report on reference to which s.17 applies

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Penalties for contravention of order under s.22

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Subject to the following provisions of this Part of this Act, any person who contravenes a prohibition imposed by an order under section 22 of this Act, or who does not comply with a requirement imposed by such an order which applies to him, shall be guilty of an offence and shall be liable—

• (a) on summary conviction, to a fine not exceeding £400;

• (b) on conviction on indictment, to a fine or to imprisonment for a term not exceeding two years or both.

Offences due to default of other person

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Where the commission by any person of an offence under section 23 of this Act is due to the act or default of some other person, that other person shall be guilty of the offence, and a person may be charged with and convicted of the offence by virtue of this section whether or not proceedings are taken against the first-mentioned person.

Defences in proceedings under s.23

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• (1) In any proceedings for an offence under section 23 of this Act it shall, subject to subsection (2) of this section, be a defence for the person charged to prove—

• (a) that the commission of the offence was due to a mistake, or to reliance on information supplied to him, or to the act or default of another person, an accident or some other cause beyond his control, and

• (b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control.

• (2) If in any case the defence provided by the preceding subsection involves the allegation that the commission of the offence was due to the act or default of another person or to reliance on information supplied by another person, the person charged shall not, without leave of the court, be entitled to rely on that defence unless, within a period ending seven clear days before the hearing, he has served on the prosecutor a notice in writing, giving such information identifying or assisting in the identification of that other person as was then in his possession.

• (3) In proceedings for an offence under section 23 of this Act committed by the publication of an advertisement, it shall be a defence for the person charged to prove that he is a person whose business it is to publish or arrange for the publication of advertisements, and that he received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to an offence under section 23 of this Act.

Limitation of effect of orders under s.22

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A contract for the supply of goods or services shall not be void or unenforceable by reason only of a contravention of an order made under section 22 of this Act; and, subject to the provisions of section 18 of the Interpretation Act 1978 (which relates to offences under two or more laws), the provisions of this Part of this Act shall not be construed as—

• (a) conferring a right of action in any civil proceedings (other than proceedings for the recovery of a fine) in respect of any contravention of such an order, or

• (b) affecting any restriction imposed by or under any other enactment, whether public, local or private, or

• (c) derogating from any right of action or other remedy (whether civil or criminal) in proceedings instituted otherwise than under this Part of this Act.

Enforcement of orders

Enforcing authorities

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• (1) It shall be the duty of every local weights and measures authority to enforce within their area the provisions of any order made under section 22 of this Act; . . .

• (2) Nothing in subsection (1) shall be taken as authorising a local weights and measures authority in Scotland to institute proceedings for an offence.

Power to make test purchases

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A local weights and measures authority may make, or may authorise any of their officers to make on their behalf, such purchases of goods, and may authorise any of their officers to obtain such services, as may be expedient for the purpose of determining whether or not the provisions of any order made under section 22 of this Act are being complied with.

Power to enter premises and inspect and seize goods and documents

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• (1) A duly authorised officer of a local weights and measures authority, or a person duly authorised in writing by the Secretary of State, may at all reasonable hours, and on production, if required, of his credentials, exercise the following powers, that is to say—

• (a) he may, for the purpose of ascertaining whether any offence under section 23 of this Act has been committed, inspect any goods and enter any premises other than premises used only as a dwelling;

• (b) if he has reasonable cause to suspect that an offence under that section has been committed, he may, for the purpose of ascertaining whether it has been committed, require any person carrying on a business or employed in connection with a business to produce any books or documents relating to the business and may take copies of, or of any entry in, any such book or document;

• (c) if he has reasonable cause to believe that such an offence has been committed, he may seize and detain any goods for the purpose of ascertaining, by testing or otherwise, whether the offence has been committed;

• (d) he may seize and detain any goods or documents which he has reason to believe may be required as evidence in proceedings for such an offence;

• (e) he may, for the purpose of exercising his powers under this subsection to seize goods, but only if and to the extent that it is reasonably necessary in order to secure that the provisions of an order made under section 22 of this Act are duly observed, require any person having authority to do so to break open any container or open any vending machine and, if that person does not comply with the requirement, he may do so himself.

• (2) A person seizing any goods or documents in the exercise of his powers under this section shall inform the person from whom they are seized and, in the case of goods seized from a vending machine, the person whose name and address are stated on the machine as being the proprietor’s or, if no name and address are so stated, the occupier of the premises on which the machine stands or to which it is affixed.

• (3) If a justice of the peace, on sworn information in writing,—

• (a) is satisfied that there is reasonable ground to believe either—

• (i) that any goods, books or documents which a person has power under this section to inspect are on any premises and that their inspection is likely to disclose evidence of the commission of an offence under section 23 of this Act, or

• (ii) that any offence under section 23 has been, is being or is about to be committed on any premises, and

• (b) is also satisfied either—

• (i) that admission to the premises has been or is likely to be refused and that notice of intention to apply for a warrant under this subsection has been given to the occupier, or

• (ii) that an application for admission, or the giving of such a notice, would defeat the object of the entry or that the premises are unoccupied or that the occupier is temporarily absent, and it might defeat the object of the entry to await his return,

the justice may by warrant under his hand, which shall continue in force for a period of one month, authorise any such officer or other person as is mentioned in subsection (1) of this section to enter the premises, if need be by force.

In the application of this subsection to Scotland, “justice of the peace” shall be construed as including a sheriff and a magistrate.

• (4) A person entering any premises by virtue of this section may take with him such other persons and such equipment as may appear to him necessary; and on leaving any premises which he has entered by virtue of a warrant under subsection (3) of this section he shall, if the premises are unoccupied or the occupier is temporarily absent, leave them as effectively secured against trespassers as he found them.

• (5) Nothing in this section shall be taken to compel the production by a relevant lawyer of a document containing a privileged communication made by or to him in that capacity or to authorise the taking of possession of any such document which is in his possession.

• (6) “Relevant lawyer” means a barrister, advocate, solicitor, or other legal representative communications with whom may be the subject of a claim to privilege.

Offences in connection with exercise of powers under s.29

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• (1) Subject to subsection (6) of this section, any person who—

• (a) wilfully obstructs any such officer or person as is mentioned in subsection (1) of section 29 of this Act acting in the exercise of any powers conferred on him by or under that section, or

• (b) wilfully fails to comply with any requirement properly made to him by such an officer or person under that section, or

• (c) without reasonable cause fails to give to such an officer or person so acting any other assistance or information which he may reasonably require of him for the purpose of the performance of his functions under this Part of this Act,

shall be guilty of an offence.

• (2) If any person, in giving any such information as is mentioned in subsection (1)(c) of this section, makes any statement which he knows to be false, he shall be guilty of an offence.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) If any person who is neither a duly authorised officer of a weights and measures authority nor a person duly authorised in that behalf by the Secretary of State purports to act as such under section 29 of this Act or under this section, he shall be guilty of an offence.

• (5) Any person guilty of an offence under subsection (1) of this section shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and any person guilty of an offence under subsection (2)... or subsection (4) of this section shall be liable—

• (a) on summary conviction, to a fine not exceeding £400;

• (b) on conviction on indictment, to a fine or to imprisonment for a term not exceeding two years or to both.

• (6) Nothing in this section shall be construed as requiring a person to answer any question or give any information if to do so might incriminate that person or (where that person is married or a civil partner) the spouse or civil partner of that person.

Notice of test

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Where any goods seized or purchased by a person in pursuance of this Part of this Act are submitted to a test, then—

• (a) if the goods were seized, he shall inform any such person as is mentioned in section 29(2) of this Act of the result of the test;

• (b) if the goods were purchased and the test leads to the institution of proceedings for an offence under section 23 of this Act, he shall inform the person from whom the goods were purchased, or, in the case of goods sold through a vending machine, the person mentioned in relation to such goods in section 29(2) of this Act, of the result of the test;

and where, as a result of the test, proceedings for an offence under section 23 of this Act are instituted against any person, he shall allow that person to have the goods tested on his behalf if it is reasonably practicable to do so.

Compensation for loss in respect of goods seized under s.29

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• (1) Where in the exercise of his powers under section 29 of this Act a person seizes and detains any goods, and their owner suffers loss by reason of their being seized or by reason that the goods, during the detention, are lost or damaged or deteriorate, unless the owner is convicted of an offence under section 23 of this Act committed in relation to the goods, the appropriate authority shall be liable to compensate him for the loss so suffered.

• (2) Any disputed question as to the right to or the amount of any compensation payable under this section shall be determined by arbitration and, in Scotland, by a single arbiter appointed, failing agreement between the parties, by the sheriff.

• (3) In this section “the appropriate authority”—

• (a) in relation to goods seized by an officer of a local weights and measures authority, means that authority, and

• (b) in any other case, means the Secretary of State.

Application of Part II to Northern Ireland

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• (1) It shall be the duty of the Department of Commerce for Northern Ireland to enforce in Northern Ireland the provisions of any order under section 22 of this Act.

• (2) In the application of this Part of this Act to Northern Ireland—

• (a) section 27 shall not apply;

• (b) in sections 28 and 29, any reference to a local weights and measures authority shall be construed as a reference to the Department of Commerce for Northern Ireland, and the provisions of sections 30 to 32 shall be construed accordingly;

• (c) in section 29(3), any reference to a justice of the peace shall be construed as a reference to a resident magistrate; and

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III — Additional Functions of Director for Protection of Consumers

Action by Director with respect to course of conduct detrimental to interests of consumers

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Proceedings before Restrictive Practices Court

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Evidence in proceedings under s.35

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Order of, or undertaking given to, Court in proceedings under s.35

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Provisions as to persons consenting to or conniving at courses of conduct detrimental to interests of consumers

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Order of, or undertaking given to, Court in proceedings under s.38

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Provisions as to interconnected bodies corporate

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Concurrent jurisdiction of other courts in certain cases

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Appeals from decisions or orders of courts under Part III

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Legal aid in proceedings under Part III in Restrictive Practices Court

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• (1) The paragraph set out in the next following subsection shall be inserted—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IV — Functions of Director and Commission in Relation to Monopoly Situations and Uncompetitive Practices

Powers for Director to require information

General power for Director to require information

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Special power to require information with respect to complex monopoly situations

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Supplementary provisions as to requirements to furnish information

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Monopoly references

General provisions as to monopoly references

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Monopoly reference limited to the facts

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Monopoly reference not limited to the facts

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Monopoly references by Director

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Monopoly references by Ministers

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Variation of monopoly reference

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Publication of monopoly references and variations, and of directions relating to them

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Report of Commission on monopoly reference

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Time-limit for report on monopoly reference

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Order of appropriate Minister on report on monopoly reference

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Part V — Mergers

Newspaper merger references

Meaning of "newspaper", "transfer of newspaper or of newspaper assets" and related expressions

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Prohibition of certain newspaper mergers

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Newspaper merger reference

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Time-limit for report on newspaper merger reference

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Report on newspaper merger reference

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Enforcement provisions relating to newspaper mergers

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Other merger references

Merger references to which ss.64 to 75 apply

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Merger situation qualifying for investigation

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Enterprises ceasing to be distinct enterprises

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Time when enterprises cease to be distinct

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Valuation of assets taken over

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Supplementary provisions as to merger situations qualifying for investigation

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Different kinds of merger references

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Time-limit for report on merger reference

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Variation of certain merger references

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Report of Commission on merger reference

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Order of Secretary of State on report on merger reference

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Interim order in respect of merger reference

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Reference in anticipation of merger

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Supplementary

Functions of Director in relation to merger situations

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Associated persons

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Part VI — References to Commission other than Monopoly and Merger References

General references

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References as to restrictive labour practices

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Variation of reference under Part VI

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Part VII — Provisions Relating to References to Advisory Committee or to Commission

Procedure in carrying out investigations

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General provisions as to reports

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Laying before Parliament and publication of reports

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Part VIII — Additional Provisions relating to References to Commission

Public interest

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Attendance of witnesses and production of documents

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Director to receive copies of reports

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Supplementary provisions as to laying reports before Parliament

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Action by Director in consequence of report of Commission on monopoly or merger reference

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Interim order after report of Commission under s.54 or s.72

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General provisions as to orders under ss.56, 73, 74 and 89

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Procedure relating to orders to which s.90 applies

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Investigation of company or association with reference to order to which s.90 applies

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Enforcement of orders to which s.90 applies

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Part IX — Amendments of Restrictive Trade Practices Acts

Transfer of functions of Registrar to Director

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• (1) Subject to the transitional provisions having effect by virtue of section 139 of this Act, the functions of the Registrar of Restrictive Trading Agreements are hereby transferred to the Director,...

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agreements as to prices to be recommended or suggested for resale of goods

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Subscriptions to trade associations

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In section 6 of the Act of 1956 (agreements to which Part I applies), after subsection (5) (which relates to obligations to make payments calculated by reference to certain variable factors) there shall be inserted the following proviso:—

Provided that this subsection does not apply to any obligation on the part of any person to make payments to a trade association of which he is a member, if the payments are to consist only of bona fide subscriptions for membership of the association

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"Trade association" not to include certain approved societies

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In section 6(8) of the Act of 1956 (which contains a definition of " trade association"), after the words " or of persons represented by its members " there shall be inserted the words " and which is not a society for the time being approved under section 6A of this Act ".

Wholesale co-operative societies

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After section 6 of the Act of 1956 there shall be inserted the following section:—

(6A) (1) The Secretary of State may approve under this section any industrial and provident society which in his opinion fulfils the following conditions, that is to say— (a) that it carries on business in the production or supply of goods or in the supply of services or in the application to goods of any process of manufacture ; (b) that its shares are wholly or mainly held by industrial and provident societies ; and (c) that those societies are retail societies or societies whose shares are wholly or mainly held by retail societies. (2) An approval given in respect of a society under this section shall (if it has not been previously withdrawn) expire at the end of the period of two years beginning with the date on which it was given or, if that period is extended (once or more than once) under the next following subsection, at the end of that period as so extended, or further extended, as the case may be. (3) The Secretary of State may extend or, if it has already been extended under this subsection, may further extend the period of two years referred to in subsection (2) of this section by such period, not exceeding two years, as he may specify. (4) The Secretary of State may at any time withdraw an approval given in respect of a society under this section if it appears to him— (a) that the society has made an agreement which . would have been subject to registration under this Part of this Act if the approval had not been given, or that such a recommendation as is mentioned in section 6(7) of this Act has been made by or on behalf of the society, and (b) that the agreement or recommendation has such adverse effects on competition that it should not be precluded from being investigated by the Court under the following provisions of this Part of this Act. (5) On the expiry or withdrawal of an approval given in respect of a society under this section, the provisions of this Part of this Act shall have effect in relation to agreements and recommendations made by the society during the currency of the approval as if the society had not been approved under this section. (6) In this section— - " industrial and provident society " means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or under the corresponding law in Northern Ireland ; - " retail society " means a society which carries on business in the sale by retail of goods for the domestic or personal use of individuals dealing with the society, or in the provision of services for such individuals; - " the corresponding law in Northern Ireland " means the law for the time being in force in Northern Ireland for purposes corresponding to those of the Industrial and Provident Societies Act 1965 ".

Agreements relating to coal or steel

99

In section 7 of the Act of 1956, before subsection (2) there shall be inserted the following subsections:—

(1A) In determining whether an agreement is an agreement to which this Part of this Act applies, where— (a) the parties to the agreement are or include two or more bodies to which this subsection applies, and (b) restrictions relating to coal or steel, or relating to both coal and steel, are accepted under the agreement by two or more such bodies, whether the restrictions so accepted by those bodies are the same restrictions or different restrictions, no account shall be taken of any such restriction which is accepted under the agreement by a body to which this subsection applies, whether that restriction is also accepted by any other party to the agreement or not (1B) Subsection (1A) of this section applies to any body which, in accordance with Article 80 of the E.C.S.C. Treaty, constitutes an undertaking for the purposes of Articles 65 and 66 of that Treaty, and in that subsection " coal" and " steel" have the meanings assigned to them respectively by Annex I to that Treaty.

Agreements to comply with standards of performance

100

In section 7(3) of the Act of 1956 (which makes provision as to agreements to comply with standards of dimension, design or quality) in paragraph (a), for the words " or quality " there shall be substituted the words " quality or performance ".

Patent or design pooling agreements

101

In section 8 of the Act of 1956, at the beginning of subsection (4) there shall be inserted the words " Subject to section 8A of this Act " ; and after that section there shall be inserted the following section:—

(8A) (1) No licence, assignment or agreement shall by virtue of section 8(4) of this Act be precluded from being an agreement to which Part I of this Act applies if— (a) in the case of an agreement, it is a patent or design pooling agreement, or (b) whether being a licence, assignment or agreement, it is a licence, assignment or agreement granted or made in pursuance (directly or indirectly) of a patent or design pooling agreement. (2) In this section (subject to subsection (4)) 'patent or design pooling agreement' means an agreement to which the parties are or include at least three persons (in this sub-section referred to as ' principal parties ') each of whom has an interest in one or more patents or registered designs, whereby each of the principal parties agrees, in respect of patents or registered designs in which he has an interest, or in respect of patents or registered designs in which he has or may during the currency of the agreement acquire an interest,— (a) to grant an interest in one or more such patents or registered designs to one or more of the other principal parties, or to one or more of those parties and to other persons, or (b) to grant an interest in at least one such patent or registered design to a third person for the purpose of enabling that person to grant an interest in it to one or more of the other principal parties, or to one or more of those parties and to other persons, and ' interest', in relation to a patent or registered design, mean an interest as proprietor or licensee of the patent or registered design or an interest consisting of such rights as a person has by virtue of having applied for a patent or for the registration of a design or by virtue of having acquired the right to apply for a patent or for the registration of a design. (3) For the purposes of this section a licence, assignment or agreement— (a) shall be taken to be granted or made directly in pursuance of a patent or design pooling agreement if it is granted or made in pursuance of provisions of that agreement such as are mentioned in paragraph (a) of subsection (2) of this section, and (b) shall be taken to be granted or made indirectly in pursuance of a patent or design pooling agreement if it is granted or made by a third person to whom an interest has been granted in pursuance of provisions of that agreement such as are mentioned in paragraph (b) of that subsection. (4) In relation to any interest held by or granted to any two or more persons jointly, subsection (2) of this section shall apply as if those persons were one person by whom the interest is held or to whom it is granted, and accordingly those persons shall be treated for the purposes of that subsection as together constituting one party

.

Particulars of export agreements to be furnished to Director

102

• (1) The following subsection shall be added at the end of section 10 of the Act of 1956:—

(8) Subsections (1) to (6) of this section shall have effect in relation to any agreement which— (a) relates to exports from the United Kingdom, and (b) would, but for section 8(8) of this Act, be an agreement subject to registration under this Part of this Act, as if, in those subsections, any reference to an agreement being or becoming subject to such registration were a reference to its being or becoming an agreement which, but for section 8(8) of this Act, would be subject to such registration.

• (2) The following subsection shall be added at the end of section 14 of the Act of 1956:—

(4) In subsection (1) of this section the reference to an agreement subject to registration under this Part of this Act shall be construed as including a reference to any agreement which— (a) relates to exports from the United Kingdom, and (b) would, but for section 8(8) of this Act, be an agreement subject to registration under this Part of this Act.

• (3) Subsection (1) of section 31 of the Act of 1956 (which requires particulars of agreements relating to exports to be furnished to the Secretary of State) shall cease to have effect.

Examination on oath of certain employees of bodies corporate and unincorporated trade associations

103

• (1) In subsection (3) of section 15 of the Act of 1956 (which in certain cases enables an order to be made for the attendance and examination on oath of an officer of a body corporate), after the words "director, manager, secretary or other officer of that body corporate " there shall be inserted the words " or of any person who (not being such a director, manager, secretary or other officer) is employed by the body corporate and appears to the Court to be likely to have particular knowledge of any of the matters in respect of which the notice was given ".

• (2) After that subsection there shall be inserted the following subsections:—

(3A) The provisions of subsection (3) of this section shall have effect in relation to a trade association which is not incorporated as they have effect in relation to a body corporate. (3B) Nothing in this section shall be taken to compel the disclosure by a barrister, advocate or solicitor of any privileged communication made by or to him in that capacity, or the production by him of any document containing any such communication.

Extension of certain powers of Restrictive Practices Court

104

• (1) In section 20 of the Act of 1956 (jurisdiction and powers of Restrictive Practices Court), in subsection (3) (which enables the Court to make orders imposing certain restraints on parties to an agreement in respect of restrictions found by the Court to be contrary to the public interest), after the words " United Kingdom " there shall be inserted the words " any trade association of which any such person is a member or any person acting on behalf of such a trade association " ; and at the end of that subsection there shall be added the words

or (c) where such an agreement as is mentioned in paragraph (b) of this subsection has already been made, from giving effect to that agreement or enforcing or purporting to enforce it; and, where any of the parties to the agreement against whom the order is made is a member of a trade association, the order may include provisions for restraining the trade association, and any person acting on its behalf, from procuring or assisting any such party to do anything which would be a contravention of the order in its application to him

.

• (2) In section 7 of the Act of 1968 (consequences of failure to register), in subsection (3) (which enables the Restrictive Practices Court to make orders imposing certain restraints on parties to an agreement of which particulars have not been duly furnished), after the words " United Kingdom " there shall be inserted the words " any trade association of which any such person is a member or any person acting on behalf of such a trade association " . and for the word " him " there shall be substituted the words " that person or association " ; and after that subsection there shall be inserted the following subsection:—

(3A) Where an order is made under subsection (3) of this section against any party to an agreement and that party is a member of a trade association, the order may include provisions for restraining the trade association, and any person acting on its behalf, from procuring or assisting that party to do anything which would be a contravention of the order in its application to him

.

Interim orders of Restrictive Practices Court

105

After section 21 of the Act of 1956 there shall be inserted the following section:—

(21A) (1) Where the Director has made an application in respect of an agreement under subsection (1) of section 20 of this Act, then at any time, whether before or after the Court has made a declaration under that subsection in respect of the agreement, but before the Court has made an order in respect of it under subsection (3) of that section, the Director may apply to the Court for an interim order under this section. (2) An application under this section shall specify the restrictions which appear to the Director, in relation to the agreement to which the application relates,— (a) to be restrictions such as are mentioned in section 20(1) of this Act, and (b) to be contrary to the public interest, and (c) to be restrictions in respect of which, in accordance with the following provisions of this section, it would be appropriate for an interim order to be made. (3) If on an application under this section the Court is satisfied that the following conditions are fulfilled in relation to all or any of the restrictions specified in the application, that is to say— (a) that they are restrictions such as are mentioned in section 20(1) of this Act; (b) that they could not reasonably be expected to be shown to fall within any of paragraphs (a) to (h) of section 21(1) of this Act; and (c) that the operation of the restrictions, during the period likely to elapse before an order can be made in respect of them under section 20(3) of this Act, is likely to cause material detriment to the public or a section of the public generally, or to a particular person who is not a party to the agreement, the Court may, if it thinks fit, make an interim order specifying the restrictions in relation to which the Court is satisfied that those conditions are fulfilled. (4) Any such interim order may exercise, in respect of the restrictions specified in the order, any powers which could be exercised in respect of them by an order under section 20(3) of this Act if those restrictions had been found by the Court to be contrary to the public interest. (5) At any time when any such interim order is in force the Court, on the application of the Director or of any person who is subject to or entitled to the benefit of any restriction specified in the order, may discharge the order and substitute for it any interim order which could have been made on the original application under this section. (6) An interim order made under this section in respect of an agreement shall cease to have effect on the occurrence of whichever of the following first occurs, that is to say— (a) the termination of such period, or the happening of such event, as may be specified for that purpose in the order; (b) the discharge of the order by the Court; (c) a declaration by the Court that the restrictions specified in the interim order are not contrary to the public interest; (d) the final determination by the Court of an application under section 20(3) of this Act in respect of that agreement.

Industrial and provident societies and their subsidiaries

106

In section 36(1) of the Act of 1956, in the definition of " inter-connected bodies corporate ", after the words " all other bodies corporate which are its subsidiaries within the meaning of section one hundred and fifty-four of the Companies Act 1948 " there shall be inserted the words " or (in the case of an industrial and provident society) within the meaning of section 15 of the Friendly and Industrial and Provident Societies Act 1968 ".

Part X

Order bringing under control restrictive agreements relating to services

107

Order bringing under control information agreements relating to services

108

• (1) The Secretary of State may by statutory instrument make an order in respect of a class of services described in the order (in this Act referred to, in relation to an order under this section, as " services brought under control by the order ") and direct by the order that, subject to the following provisions of this Part of this Act, the agreements to which Part I of the Act of 1956 applies shall include agreements, whether made before or after the passing of this Act and whether before or after the making of the order, which—

• (a) are agreements between two or more persons carrying on business within the United Kingdom in the supply of services brought under control by the order, or between two or more such persons together with one or more other parties, and

• (b) are agreements under which provision is made for or in relation to the furnishing by two or more parties to each other or to other persons (whether parties or not) of information with respect to matters specified in the order for the purposes of this paragraph.

• (2) A class of services described in an order under this section, as being the services brought under control by the order may consist—

• (a) of services of one or more descriptions specified in that behalf in the order, or

• (b) of all services except services of one or more descriptions so specified, or

• (c) of all services without exception.

• (3) The matters which may be specified in such an order for the purposes of subsection (1)(b) of this section are any of the following, that is to say—

• (a) the charges made, quoted or paid or to be made, quoted or paid for designated services which have been or are to be supplied, offered or obtained ;

• (b) the terms or conditions on or subject to which designated services have been or are to be supplied or obtained;

• (c) the extent (if any) to which, or the scale (if any) on which, designated services have been or are to be made available, supplied or obtained ;

• (d) the form or manner in which designated services have been or are to be made available, supplied or obtained ;

• (e) the costs incurred or to be incurred in making available, supplying or obtaining designated services;

• (f) the persons or classes of persons for whom or from whom, or the areas or places in or from which, designated services have been or are to be made available or supplied or have been or are to be obtained.

Designated services

109

• (1) In relation to any order made under section 107 or section 108 of this Act, " designated services " in this Part of this Act means services of any class described in the order as being designated services.

• (2) Subject to the next following subsection, a class of services described in any such order as being designated services may consist wholly or partly of services brought under control by the order or wholly or partly of other services, and may be described so as to consist—

• (a) of services of one or more descriptions specified in that behalf in the order, or

• (b) of all services except services of one or more descriptions so specified,

and different classes of services may be so described in relation to different matters specified in the order for the purposes of section 107(1)(b) or section 108(1)(b) of this Act, as the case may be.

• (3) A class of services described in such an order as being designated services shall not include any of the services specified in Schedule 4 to this Act.

Supplementary provisions as to orders under s.107 or s.108

110

• (1) An order under section 107 or section 108 of this Act may limit the operation of the order to agreements fulfilling such conditions (in addition to those mentioned in section 107 or section 108, as the case may be) as may be specified in the order.

• (2) In particular, but without prejudice to the generality of the preceding subsection, an order under section 108 of this Act may limit the operation of the order to agreements under which the provision for the furnishing of information (as mentioned in subsection (1)(b) of that section) is provision of a kind specified in the order or provides for the furnishing of information of a kind so specified.

• (3) Subject to subsection (1) of this section—

• (a) for the purposes of any order under section 107 of this Act it is immaterial whether any restrictions accepted by parties to an agreement relate to the same or to different matters specified in the order for the purposes of subsection (1)(b) of that section, or have the same or a different effect in relation to any matter so specified, and

• (b) for the purposes of any order under section 108 of this Act it is immaterial whether any provision made by an agreement for or in relation to the furnishing of information relates to the same or to different matters specified in the order for the purposes of subsection (1)(,b) of that section,

and it is immaterial for those purposes whether the parties accepting any restrictions, or the parties by whom any information is to be furnished, as the case may be, carry on the same class or different classes of business.

• (4) Where, at a time when an order under section 107 or section 108 of this Act (in this subsection referred to as " the earlier order") is in force, another order (in this subsection referred to as " the subsequent order ") is made under the same section, the subsequent order may provide that—

• (a) for the purposes of the earlier order, or

• (b) for the purposes of the subsequent order, or

• (c) for the purposes of both orders,

the condition specified in subsection (1)(a) of section 107 or in subsection (1)(a) of section 108 of this Act, as the case may be, shall be treated as fulfilled in relation to an agreement if it is an agreement to which the parties are or include one person carrying on business in the United Kingdom in the supply of services brought under control by the earlier order and one person carrying on business within the United Kingdom in the supply of services brought under control by the subsequent order.

• (5) Subsection (4) of this section shall have effect without prejudice to any power to vary any order made under section 107 or section 108 of this Act.

• (6) In the following provisions of this Part of this Act " the relevant enactments ", in relation to an order under section 107 or section 108 of this Act, means the provisions of this Part of this Act (including whichever of those sections is applicable) as they have effect in relation to that order and the provisions of the Act of 1956 and of the Act of 1968 as applied in relation to that order by the following provisions of this Part of this Act.

Procedure in relation to orders under s.107 or s.108

111

• (1) No order shall be made under section 107 or section 108 of this Act unless a draft of the order has been laid before Parliament and approved by a resolution of each House of Parliament.

• (2) Before laying before Parliament a draft of any such order, the Secretary of State shall publish in such manner as he thinks appropriate a notice—

• (a) describing the classes of services which, if the order is made, will be services brought under control by the order and will be designated services in relation to the order respectively;

• (b) indicating the nature of any limitation to be imposed by the order under subsection (1) or subsection (2) of section 110 of this Act; and

• (c) specifying a period (not being less than twenty-eight days) within which representations with respect to the proposed order may be made to the Secretary of State.

• (3) In settling the draft to be laid before Parliament the Secretary of State shall take into consideration any representations with respect to the proposed order which may be received by him within the period specified in the notice in accordance with subsection (2)(c) of this section.

Provisions as to certain associations

112

• (1) For the purposes of any order made under section 107 or section 108 of this Act, and for the purposes of the operation of the relevant enactments in relation to any such order, subsections (2) to (5) of this section shall have effect in relation to any association (whether incorporated or not) if—

• (a) its membership consists wholly or mainly of persons (in this subsection referred to as " members affected by the order ") who are either engaged in the supply of services brought under control by the order or are employed by or represent persons so engaged, and

• (b) its objects or activities include the promotion of the interests of persons engaged in the supply of those services who are either members affected by the order or are persons represented by such members, and

• (c) it is not a society which is for the time being approved under section 6A of the Act of 1956.

• (2) The relevant enactments shall have effect in relation to any agreement made by the association—

• (a) as if the agreement were made between all persons who are members of the association or are represented on it by members of the association, and

• (b) where any restriction is accepted under the agreement by the association, or provision is made in the agreement for or in relation to the furnishing of information by the association, as if the like restriction were accepted by, or (as the case may be) the like provision were made for or in relation to the furnishing of information by, each of the persons who are members of the association or are so represented.

• (3) Where the order is one made under section 107 of this Act, and specific recommendations (whether express or implied) are made by or on behalf of the association to its members, or to any class of its members, as to the action to be taken or not to be taken by them in relation to any particular class of services in respect of any matters specified in the order for the purposes of subsection (1)(b) of that section, the relevant enactments shall have effect in relation to the agreement for the constitution of the association as if it contained a term by which each such member, and any person represented on the association by any such member, agreed to comply with those recommendations and with any subsequent recommendations made to them by or on behalf of the association as to the action to be taken by them in relation to the same class of services and in respect of the same matters.

• (4) Where the order is one made under section 108 of this Act, and specific recommendations (whether express or implied) are made by or on behalf of the association to its members, or to any class of its members, as to the furnishing of information in relation to any particular class of services in respect of any matters specified in the order for the purposes of subsection (1)(b) of that section, the relevant enactments shall have effect in relation to the agreement for the constitution of the association as if it contained a term by which each such member, and any person represented on the association by any such member, agreed to comply with those recommendations and with any subsequent recommendations made to them by or on behalf of the association as to the furnishing of information in relation to the same class of services and in respect of the same matters.

• (5) Subsection (3) or subsection (4) of this section (where applicable) shall have effect in relation to the agreement for the constitution of an association notwithstanding any provision to the contrary in that agreement.

• (6) In relation to a society which is for the time being approved under section 6A of the Act of 1956, but which, in consequence of an order made under section 107 or section 108 of this Act, is a society to which the preceding provisions of this section would apply if it were not so approved, subsection (4) of that section (which confers power on the Secretary of State to withdraw any such approval) shall have effect as if in that subsection—

• (a) any reference to an agreement which would have been subject to registration under Part I of the Act of 1956 if the approval had not been given included a reference to an agreement which would in those circumstances have been subject to such registration by virtue of the order, and

• (b) any reference to such a recommendation as is mentioned in section 6(7) of that Act included a reference to such a recommendation as is mentioned in subsection (3) or subsection (4) of this section.

Matters to be treated as equivalent to restrictions for purposes of s.107

113

• (1) For the purposes of any order made under section 107 of this Act, and for the purposes of the operation of the relevant enactments in relation to any such order, an agreement which—

• (a) confers privileges or benefits only upon such parties as comply with conditions as to any such matters as are mentioned in subsection (3) of that section, or

• (b) imposes obligations upon parties who do not comply with such conditions,

shall be treated as an agreement under which restrictions are accepted by each of the parties in respect of those matters.

• (2) Without prejudice to the preceding subsection, an obligation on the part of any party to an agreement to make payments calculated by reference to the extent to which, or the scale on which,—

• (a) any designated services are made available or supplied by him, or

• (b) any services are obtained by him for the purpose of making available or supplying any designated services,

if the payments are calculated, or calculated at an increased rate, in respect of an extent or scale exceeding an extent or scale specified in or ascertained in accordance with the agreement, shall, subject to the next following subsection, be treated for the purposes mentioned in the preceding subsection as a restriction in respect of the extent or scale of the designated services to be made available or supplied.

• (3) Subsection (2) of this section shall not apply to any obligation on the part of any person to make payments to an association of which he is a member, if it is such an association as is mentioned in section 112(1) of this Act and the payments are to consist only of bona fide subscriptions for membership of the association.

Provisions to be disregarded

114

• (1) The following provisions of this section shall have effect for the purpose of determining whether an agreement is one to which Part I of the Act of 1956 applies by virtue of an order made under section 107 or section 108 of this Act.

• (2) Subject to subsections (3) and (4) of this section, no account shall for that purpose be taken of any term which relates exclusively to the services supplied in pursuance of the agreement in question.

• (3) Where the order referred to in subsection (1) of this section is an order under section 107 of this Act, and any of the restrictions accepted as mentioned in subsection (1)(b) of that section are accepted as between two or more persons by whom designated services are to be supplied, or as between two or more persons for whom designated services are to be supplied, in pursuance of the agreement, subsection (2) of this section shall not apply to any term of the agreement which imposes those restrictions unless those restrictions are accepted in pursuance of a previous agreement in respect of which particulars have been registered under Part I of the Act of 1956 as applied by this Part of this Act.

• (4) Where the order referred to in subsection (1) of this section is an order made under section 108 of this Act, and the term referred to in subsection (2) of this section is a term by which provision is made for the furnishing of information as mentioned in subsection (1)(b) of that section by two or more persons by whom designated services are to be supplied, or by two or more persons for whom designated services are to be supplied, in pursuance of the agreement, subsection (2) of this section shall not apply to that term unless it was included in the agreement in pursuance of a previous agreement of which particulars have been registered under Part I of the Act of 1956 as applied by this Part of this Act.

• (5) For the purpose mentioned in subsection (1) of this section no account shall be taken of any term by which the parties or any of them agree to comply with or apply, in respect of making available, supplying or obtaining any designated services,—

• (a) any standards (whether being standards of performance in the provision of the services or standards of dimension, design, quality or performance in respect of goods used in providing them) which are either standards approved for the time being by the British Standards Institution or standards prescribed or adopted by an association or other body and for the time being approved by an order made by the Secretary of State by statutory instrument, or

• (b) any arrangements either approved by the British Standards Institution, or prescribed or adopted and approved by an order of the Secretary of State, as mentioned in the preceding paragraph, as to the provision of information or advice to persons for whom designated services are supplied or agreed to be supplied.

• (6) For the purpose mentioned in subsection (1) of this section no account shall be taken of any restriction which affects or relates to any of the matters mentioned in section 7(4) of the Act of 1956 (which relates to employment and to terms and conditions of employment) or of any provision for or in relation to the furnishing of information with respect to any of those matters.

Excepted agreements

115

• (1) Subsection (1) of section 8 of the Act of 1956 (which relates to agreements expressly authorised by or under an enactment) and subsection (2) of that section (which relates to agreements constituting or forming part of a scheme certified under provisions of the Income and Corporation Taxes Act 1970 relating to schemes for rationalising industry) shall have effect in relation to any agreement notwithstanding any order under section 107 or section 108 of this Act.

• (2) Part I of the Act of 1956 shall not apply by virtue of any such order to an agreement to which there are no parties other than one person who agrees to supply services and another person for whom they are to be supplied, where neither of those persons is, in relation to that order, such an association as is mentioned in section 112(1) of this Act and, except in respect of the supply of services of the same description to, or obtaining services of the same description from, other persons,—

• (a) in the case of an order under section 107 of this Act, no restrictions are accepted under the agreement by those parties in respect of matters specified in the order for the purposes of subsection (1)(b) of that section, or

• (b) in the case of an order under section 108 of this Act, no provision is made under the agreement for or in relation to the furnishing of information with respect to matters specified in the order for the purpose of subsection (1)(b) of that section.

• (3) Subject to the next following subsection, Part I of the Act of 1956 shall not apply by virtue of any such order to any licence granted by the proprietor or any licensee of a patent or by a person who has applied for a patent, to any assignment of a patent or of the right to apply for a patent, or to any agreement for such a licence or assignment, if it is a licence, assignment or agreement under which—

• (a) in the case of an order under section 107 of this Act, no restrictions in respect of matters specified in the order for the purposes of subsection (1)(b) of that section are accepted except in respect of the invention to which the patent or application for a patent relates, or

• (b) in the case of an order under section 108 of this Act, no provision for or in relation to the furnishing of information with respect to matters specified in the order for the purposes of subsection (1)(b) of that section is made except in respect of that invention.

• (4) No licence, assignment or agreement shall by virtue of subsection (3) of this section be precluded from being an agreement to which Part I of the Act of 1956 applies if—

• (a) in the case of an agreement, it is a patent or design pooling agreement, or

• (b) whether being a licence, assignment or agreement, it is a licence, assignment or agreement granted or made in pursuance (directly or indirectly) of a patent or design pooling agreement.

• (5) Part I of the Act of 1956 shall not apply by virtue of any order under section 107 of this Act to an agreement between two persons, neither of whom is such an association as is mentioned in section 112(1) of this Act, for the exchange of informa-. tion relating to techniques or processes to be applied in the provision of designated services where—

• (a) no other person is party to the agreement, and

• (b) all such restrictions as are mentioned in section 107(1)(b) of this Act which are accepted under the agreement relate exclusively to the form or manner in which services incorporating those techniques or processes are to be made available or supplied.

• (6) Part I of the Act of 1956 shall not apply by virtue of any such order to any agreement where—

• (a) in the case of an order under section 107 of this Act, all such restrictions as are accepted under the agreement in respect of matters specified in the order for the purposes of subsection (1)(b) of .that section (or, in a case falling within subsection (3) of section 112 of this Act, all the recommendations referred to in that subsection) relate to the supply of services outside the United Kingdom or to the supply of services to persons or in relation to property outside the United Kingdom, or

• (b) in the case of an order under section 108 of this Act, all such provision as is made under the agreement for or in relation to the furnishing of information with respect to matters specified in the order for the purposes of subsection (1)(b) of that section (or, in a case falling within subsection (4) of section 112 of this Act, every such recommendation as is referred to in that subsection) relates to the supply of services as mentioned in the preceding paragraph.

• (7) Any reference in this section to restrictions accepted in respect of matters specified in an order under section 107 of this Act for the purposes of subsection (1)(b) of that section, or to provision made for or in relation to the furnishing of information with respect to matters specified in an order under section 108 of this Act for the purposes of subsection (1)(b) of that section, shall be construed, in relation to any agreement, as not including anything of which, by virtue of section 114 of this Act, account cannot be taken for the purpose mentioned in subsection (1) of that section.

• (8) Subsections (2) to (4) of section 8A of the Act of 1956 shall have effect for the purposes of this section as they have effect for the purposes of that section.

• (9) In this section " property" means property of any description, whether movable or immovable.

Application of provisions of Acts of 1956 and 1968

116

• (1) Subject to the following provisions of this section, sections 9 to 23 of the Act of 1956 shall have effect in relation to agreements to which Part I of that Act applies by virtue of an order under section 107 or section 108 of this Act as they have effect in relation to agreements to which Part I of that Act applies apart from any such order.

• (2) For the purposes of the application of those sections in relation to an agreement to which Part I of that Act applies by virtue of such an order, such of those sections as are specified in the first column of Part I of Schedule 10 to this Act shall have effect subject to the modifications specified in relation to them in the second column of that Part of that Schedule.

• (3) For the purposes of the application of section 21 of that Act in relation to an agreement to which Part I of that Act applies by virtue of such an order, that section shall have effect subject to the following modifications, that is to say—

• (a) with the substitution, for paragraphs (a) and (b) of subsection (1), of the following paragraphs:—

(a) that the restriction is reasonably necessary, having regard to the character of the services to which it applies, to protect the public against injury (whether to persons or to premises) in connection with the use of those services or in connection with the consumption, installation or use of goods in relation to which those services are supplied; (b) that the removal of the restriction would deny to the public as users of any services, or as purchasers, consumers or users of any goods in relation to which any services are supplied, other specific and substantial benefits or advantages enjoyed or likely to be enjoyed by them as such, whether by virtue of the restriction itself or of any arrangements or operations resulting therefrom

;

• (b) with the substitution, for paragraph (d) of subsection (1), of the following paragraph:—

(d) that the restriction is reasonably necessary to enable the persons party to the agreement to negotiate fair terms for the supply of services to, or for obtaining services from, any one person not party thereto who controls a preponderant part of the trade or business of supplying such services, or for the supply of services to any person not party to the agreement and not carrying on such a trade or business who, either alone or in combination with any other such person, controls a preponderant part of the market for such services

; and

• (c) with the substitution, in the provisions of that subsection after paragraph (h), for the words " (being purchasers, consumers or users of goods produced or sold by such parties, or persons engaged or seeking to become engaged in the trade or business of selling such goods or of producing or selling similar goods) " of the words " (being users of services supplied by such parties, or persons engaged or seeking to become engaged in any business of supplying such services or of making available or supplying similar services, or being purchasers, consumers or users of goods in relation to which any such services or similar services are supplied) ".

• (4) Sections 1 to 3 and sections 6 and 7 of the Act of 1968 shall have effect in relation to agreements to which Part I of the Act of 1956 applies by virtue of an order under section 107 or section 108 of this Act, but, in the case of such of those sections as are specified in the first column of Part II of Schedule 10 to this Act, shall have effect in relation to such agreements subject to the modifications specified in relation to them in the second column of that Part of that Schedule.

• (5) In section 9 of the Act of 1968 any reference to particulars entered or filed in the register pursuant to Part I of the Act of 1956 shall be construed as including a reference to particulars so entered or filed pursuant to any provisions of Part I of the Act of 1956 as applied by subsection (1) of this section.

• (6) Any reference in this section to any provisions of the Act of 1956 shall be construed as including a reference to those provisions as applied by section 5(2) of the Act of 1968 (which relates to information agreements); and the modifications of section 21 of the Act of 1956 made by subsection (3) of this section shall be construed accordingly.

• (7) Where by virtue of subsection (2) or subsection (4) of this section any provisions of the Act of 1956 or of the Act of 1968 are to have effect subject to modifications specified in Schedule 10 to this Act for the purposes of their application to an agreement to which Part I of the Act of 1956 applies by virtue of an order under section 107 or section 108 of this Act—

• (a) that order shall be taken to be " the relevant order " referred to in those modifications, and

• (b) in those modifications " the Act of 1973 " means this Act and " services brought under control by the relevant order" means services of the class described in that order in accordance with section 107(1) or section 108(1) of this Act.

Interpretation of Part X and Schedule 10

117

• (1) In this Part of this Act, and in the modifications made by it, " services " does not include the application to goods of any process of manufacture or any services rendered to an employer under a contract of employment, but, with those exceptions, includes engagements (whether professional or other) which for gain or reward are undertaken and performed for any matter other than the production or supply of goods, and any reference to the supply of services or to supplying, obtaining or offering services or to making services available shall be construed accordingly.

• (2) In this Part of this Act and in the modifications made by it " business " includes a professional practice.

• (3) Subsection (3) of section' 6 (which relates to the meaning of " agreement" and " restriction ") and subsections (1) to (3) of section 36 (interpretation) of the Act of 1956 shall have effect for the purposes of this Part of this Act and of the modifications made by it.

• (4) For the purposes of this Part of this Act any two or more interconnected bodies corporate, or any two or more individuals carrying on business in partnership with each other, shall be treated as a single person.

• (5) In this section any reference to the modifications made by this Part of this Act is a reference to any provisions which by virtue of section 116 of this Act (whether they are provisions set out in that section or in Schedule 10 to this Act) are to be treated, for purposes mentioned in that section, as substituted for provisions of the Act of 1956 or of the Act of 1968.

Part XI — Pyramid Selling and Similar Trading Schemes

Trading schemes to which Part XI applies

118

• (1) This Part of this Act applies to any trading scheme if—

• (a) the prospect is held out to participants of receiving payments or other benefits in respect of any of the matters specified in subsection (2) of this section; and

• (b) (subject to subsection (7) of this section) either or both of the conditions in subsections (3) and (4) of this section are fulfilled in relation to the scheme.

• (2) The matters referred to in paragraph (a) of subsection (1) of this section are—

• (a) the introduction by any person of other persons who become participants in a trading scheme;

• (b) the continued participation of participants in a trading scheme;

• (c) the promotion, transfer or other change of status of participants within a trading scheme;

• (d) the supply of goods or services by any person to or for other persons;

• (e) the acquisition of goods or services by any person.

• (3) The condition in this subsection is that—

• (a) goods or services, or both, are to be provided by the person promoting the scheme (in this Part of this Act referred to as “the promoter”) or, in the case of a scheme promoted by two or more persons acting in concert (in this Part of this Act referred to as “the promoters”), by one or more of those persons; and

• (b) the goods or services so provided—

• (i) are to be supplied to or for other persons under transactions effected by participants (whether in the capacity of agents of the promoter or of one of the promoters or in any other capacity), or

• (ii) are to be used for the purposes of the supply of goods or services to or for other persons under such transactions.

• (4) The condition in this subsection is that goods or services, or both, are to be supplied by the promoter or any of the promoters to or for persons introduced to him or any of the other promoters (or an employee or agent of his or theirs) by participants.

• (5) For the purposes of this Part of this Act a prospect of a kind mentioned in paragraph (a) of subsection (1) of this section shall be treated as being held out to a participant whether it is held out so as to confer on him a legally enforceable right or not.

• (6) This Part of this Act does not apply to any trading scheme—

• (a) under which the promoter or any of the promoters or participants is to carry on, or to purport to carry on, a relevant regulated activity;

• (b) which otherwise falls within a description prescribed by regulations made by the Secretary of State by statutory instrument.

• (6A) For the purposes of subsection (6)(a), “relevant regulated activity” means—

• (a) dealing in investments as principal or agent;

• (b) arranging deals in investments;

• (ba) operating a multilateral trading facility;

• (bb) operating an organised trading facility;

• (bc) operating an electronic system by means of which a qualifying public offer is made;

• (c) managing investments;

• (d) safeguarding and administering investments;

• (e) sending dematerialised instructions;

• (ea) managing a UCITS;

• (eb) acting as trustee or depositary of a UCITS;

• (ec) managing an AIF;

• (ed) acting as trustee or depositary of an AIF;

• (f) establishing etc. a collective investment scheme;

• (g) advising on investments,

and paragraphs (a) to (g) must be read with section 22 of the Financial Services and Markets Act 2000, any relevant order under that section, and Schedule 2 to that Act.

• (7) The Secretary of State may by order made by statutory instrument—

• (a) disapply paragraph (b) of subsection (1) of this section in relation to a trading scheme of a kind specified in the order; or

• (b) amend or repeal paragraph (a) of subsection (6) of this section;

and no such order, and no order varying or revoking any such order, shall be made under this subsection unless a draft of the order has been laid before Parliament and approved by a resolution of each House of Parliament.

• (8) In this Part of this Act—

• “goods” includes property of any description and a right to, or interest in, property;

• “participant” means, in relation to a trading scheme, a person (other than the promoter or any of the promoters) participating in the scheme;

• “trading scheme” includes any arrangements made in connection with the carrying on of a business, whether those arrangements are made or recorded wholly or partly in writing or not;

and any reference to the provision or supply of goods shall be construed as including a reference to the grant or transfer of a right or interest.

• (9) In this section any reference to the provision or supply of goods or services by a person shall be construed as including a reference to the provision or supply of goods or services under arrangements to which that person is a party.

Regulations relating to such trading schemes

119

• (1) Regulations made by the Secretary of State by statutory instrument may make provision with respect to the issue, circulation or distribution of any form of advertisement, prospectus, circular or notice which contains any informationcalculated to lead directly or indirectly to persons becoming participants in such a training scheme, and may prohibit any such advertisement, prospectus, circular or notice from being issued, circulated or distributed unless it complies with such requirements as to the matters to be included or not included in it as may be prescribed by the regulations.

• (2) Regulations made by the Secretary of State by statutory instrument may prohibit the promoter or any of the promoters of, or any participant in, a trading scheme to which this Part of this Act applies from—

• (a) supplying any goods to a participant in the trading scheme, or

• (b) supplying any training facilities or other services for such a participant, or

• (c) providing any goods or services under a transaction effected by such a participant, or

• (d) being a party to any arrangements under which goods or services are supplied or provided as mentioned in any of the preceding paragraphs, or

• (e) accepting from any such participant any payment, or any undertaking to make a payment, in respect of any goods or services supplied or provided as mentioned in any of paragraphs (a) to (d) of this subsection or in respect of any goods or services to be so supplied or provided,

unless (in any such case) such requirements as are prescribed by the regulations are complied with.

• (3) Any requirements prescribed by regulations under subsection (2) of this section shall be such as the Secretary of State considers necessary or expedient for the purpose of preventing participants in trading schemes to which this Part of this Act applies from being unfairly treated; and, without prejudice to the generality of this subsection, any such requirements may include provisions—

• (a) requiring the rights and obligations of every participant under such a trading scheme to be set out in full in an agreement in writing made between the participant and the promoter or (if more than one) each of the promoters;

• (b) specifying rights required to be conferred on every such participant, and obligations required to be assumed by the promoter or promoters, under any such trading scheme; or

• (c) imposing restrictions on the liabilities to be incurred by such a participant in respect of any of the matters mentioned in paragraphs (a) to (e) of subsection (2) of this section.

• (4) Regulations made under subsection (2) of this section—

• (a) may include provision for enabling a person who has made a payment as a participant in a trading scheme to which this Part of this Act applies, in circumstances where any of the requirements prescribed by the regulations were not complied with, to recover the whole or part of that payment from any person to whom or for whose benefit it was paid, and

• (b) subject to any provision made in accordance with the preceding paragraph, may prescribe the degree to which anything done in contravention of the regulations is to be treated as valid or invalid for the purposes of any civil proceedings.

• (5) The power to make regulations under this section may be exercised so as to make different provision—

• (a) in relation to different descriptions of trading schemes to which this Part of this Act applies, or

• (b) in relation to trading schemes which are or were in operation on a date specified in the regulations and trading schemes which are or were not in operation on that date,

or in relation to different descriptions of participants in such trading schemes.

Offences under Part XI

120

• (1) Subject to the next following section, any person who issues, circulates or distributes, or causes another person to issue, circulate or distribute, an advertisement, prospectus, circular or noticein contravention of any regulations made under subsection (1) of section 119 of this Act shall be guilty of an offence.

• (2) Any person who contravenes any regulations made under subsection (2) of that section shall be guilty of an offence.

• (3) If any person who is a participant in a trading scheme to which this Part of this Act applies, or has applied or been invited to become a participant in such a trading scheme,—

• (a) makes any payment to or for the benefit of the promoter or (if there is more than one) any of the promoters, or to or for the benefit of a participant in the trading scheme, and

• (b) is induced to make that payment by reason that the prospect is held out to him of receiving payments or other benefits in respect of the introduction of other persons who become participants in the trading scheme,

any person to whom or for whose benefit that payment is made shall be guilty of an offence.

• (4) If the promoter or any of the promoters of a trading scheme to which this Part of this Act applies, or any other person acting in accordance with such a trading scheme, by holding out to any person such a prospect as is mentioned in subsection (3)(b) of this section, attempts to induce him—

• (a) if he is already a participant in the trading scheme, to make any payment to or for the benefit of the promoter or any of the promoters or to or for the benefit of a participant in the trading scheme, or

• (b) if he is not already a participant in the trading scheme, to become such a participant and to make any such payment as is mentioned in the preceding paragraph,

the person attempting to induce him to make that payment shall be guilty of an offence.

• (5) In determining, for the purposes of subsection (3) or subsection (4) of this section, whether an inducement or attempt to induce is made by holding out such a prospect as is therein mentioned, it shall be sufficient if such a prospect constitutes or would constitute a substantial part of the inducement.

• (6) Where the person by whom an offence is committed under subsection (3) or subsection (4) of this section is not the sole promoter of the trading scheme in question, any other person who is the promoter or (as the case may be) one of the promoters of the trading scheme shall, subject to the next following section, also be guilty of that offence.

• (7) Nothing in subsections (3) to (6) of this section shall be construed as limiting the circumstances in which the commission of any act may constitute an offence under subsection (1) or subsection (2) of this section.

• (8) In this section any reference to the making of a payment to or for the benefit of a person shall be construed as including the making of a payment partly to or for the benefit of that person and partly to or for the benefit of one or more other persons.

Defences in certain proceedings under Part XI

121

• (1) Where a person is charged with an offence under subsection (1) of section 120 of this Act in respect of an advertisement, it shall be a defence for him to prove that he is a person whose business it is to publish or arrange for the publication of advertisements, and that he received the advertisement for publication in the ordinary course of business and did not know, and had no reason to suspect, that its publication would amount to an offence under that subsection.

• (2) Where a person is charged with an offence by virtue of subsection (6) of section 120 of this Act, it shall be a defence for him to prove—

• (a) that the trading scheme to which the charge relates was in operation before the commencement of this Act, and

• (b) that the act constituting the offence was committed without his consent or connivance.

Penalties for offences under Part XI

122

A person guilty of an offence under this Part of this Act shall be liable—

• (a) on summary conviction, to a fine not exceeding £400 or to imprisonment for a term not exceeding three months or to both;

• (b) on conviction on indictment, to a fine or to imprisonment for a term not exceeding two years or to both.

Enforcement provisions

123

• (1) The provisions of sections 29 to 32 of this Act shall have effect for the purposes of this Part of this Act as if in those provisions—

• (a) references to a weights and measures authority or a duly authorised officer of such an authority were omitted, and