The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001

Made: 19th March 2001

Laid before Parliament: 19th March 2001

Coming into force in accordance with article 1

The Treasury in the exercise of the powers conferred on them by section 238(6) and (7) of the Financial Services and Markets Act 2000[^f00001] and of all other powers enabling them in that behalf hereby make the following Order:—

PART I — GENERAL AND INTERPRETATION

Citation and commencement

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• (1) This Order may be cited as the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001.

• (2) This Order comes into force on the day on which section 19 of the Act comes into force.

Interpretation: general

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• (1) In this Order—

• “the Act” means the Financial Services and Markets Act 2000;

• “authorised contractual scheme” and “authorised unit trust scheme” have the meaning given in section 237(3) of the Act;

• “close relative”, in relation to a person means—his spouse or civil partner;his children and step-children, his parents and step-parents, his brothers and sisters and his step-brothers and step-sisters; andthe spouse or civil partner of any person within sub-paragraph (b);

• “Full name”, in relation to a person, means the name under which that person carries on business and, if different, that person’s corporate name.

• “overseas scheme” means an unregulated scheme which is operated and managed in a country or territory outside the United Kingdom;

• “publication” means—a newspaper, journal, magazine or other periodical publication;a web site or similar system for the electronic display of information;any programme forming part of a service consisting of the broadcast or transmission of television or radio programmes; andany teletext service, that is to say a service consisting of television transmissions consisting of a succession of visual displays (with or without accompanying sound) capable of being selected and held for separate viewing or other use;

• “qualifying contract of insurance” has the meaning given in the Regulated Activities Order;

• “the Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001[^f00002];

• “relevant scheme activities” means— any activity specified by article 51ZA, 51ZB, 51ZD or 51ZE of the Regulated Activities Order; orany activity specified by article 14, 21, 25, 37 or 53 of that Order when carried on in relation to units;

• “solicited real time communication” has the meaning given by article 5;

• “units” has the meaning given by section 237(2) of the Act;

• “unregulated scheme” means a collective investment scheme which is not an authorised unit trust scheme nor an authorised contractual scheme nor a scheme constituted by an authorised open-ended investment company nor a recognised scheme for the purposes of Part XVII of the Act;

• “unsolicited real time communication” has the meaning given by article 5.

• (2) In this Order, any reference to the “scheme promotion restriction” means the restriction imposed by section 238(1) of the Act.

Interpretation: communications

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In this Order—

• (a) any reference to a communication is a reference to the communication, by an authorised person in the course of business, of an invitation or inducement to participate in an unregulated scheme;

• (b) any reference to a communication being made to another person is a reference to a communication being addressed, whether verbally or in legible form, to a particular person or persons (for example where it is contained in a telephone call or letter);

• (c) any reference to a communication being directed at persons is a reference to a communication being addressed to persons generally (for example where it is contained in a television broadcast or web site);

• (d) “communicate” includes causing a communication to be made;

• (e) a “recipient” of a communication is a person to whom the communication is made or, in the case of a non-real time communication which is directed at persons generally, any person who reads or hears the communication.

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation: real time communications

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• (1) In this Order, references to a real time communication are references to any communication made in the course of a personal visit, telephone conversation or other interactive dialogue.

• (2) A non-real time communication is a communication not falling within paragraph (1).

• (3) For the purposes of this Order, non-real time communications include communications made by letter or e-mail or contained in a publication.

• (4) For the purposes of this Order, the factors in paragraph (5) are to be treated as indications that a communication is a non-real time communication.

• (5) The factors are that—

• (a) the communication is made to or directed at more than one recipient in identical terms (save for details of the recipient’s identity);

• (b) the communication is made or directed by way of a system which in the normal course constitutes or creates a record of the communication which is available to the recipient to refer to at a later time;

• (c) the communication is made or directed by way of a system which in the normal course does not enable or require the recipient to respond immediately to it.

Interpretation: solicited and unsolicited real time communications

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• (1) A real time communication is solicited where it is made in the course of a personal visit, telephone call or other interactive dialogue if that call, visit or dialogue—

• (a) was initiated by the recipient of the communication; or

• (b) takes place in response to an express request from the recipient of the communication.

• (2) A real time communication is unsolicited where it is made otherwise than as described in paragraph (1).

• (3) For the purposes of paragraph (1)—

• (a) a person is not to be treated as expressly requesting a call, visit or dialogue—

• (i) because he omits to indicate that he does not wish to receive any or any further visits or calls or to engage in any or any further dialogue;

• (ii) because he agrees to standard terms that state that such visits, calls or dialogue will take place, unless he has signified clearly that, in addition to agreeing to the terms, he is willing for them to take place;

• (b) a communication is solicited only if it is clear from all the circumstances when the call, visit or dialogue is initiated or requested that during the course of the visit, call or dialogue communications will be made concerning the kind of activities or investments to which the communications in fact made relate;

• (c) it is immaterial whether the express request is made before or after this Order comes into force.

• (4) Where a real time communication is solicited by a recipient (“R”), it is treated as having also been solicited by any other person to whom it is made at the same time as it is made to R if that other recipient is—

• (a) a close relative of R; or

• (b) expected to participate in the unregulated scheme jointly with R.

Degree of prominence to be given to required indications

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Where a communication must, if it is to fall within any provision of this Order, be accompanied by an indication of any matter, the indication must be presented to the recipient—

• (a) in a way that can be easily understood; and

• (b) in such manner as, depending on the means by which the communication is made or directed, is best calculated to bring the matter in question to the attention of the recipient and to allow him to consider it.

Combination of different exemptions

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Nothing in this Order is to be construed as preventing a person from relying on more than one exemption in respect of the same communication.

PART II — TERRITORIAL SCOPE

Communications to overseas recipients

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• (1) Subject to paragraph (2), the scheme promotion restriction does not apply to any communication—

• (a) which is made (whether from inside or outside the United Kingdom) to a person who receives the communication outside the United Kingdom; or

• (b) which is directed (whether from inside or outside the United Kingdom) only at persons outside the United Kingdom.

• (2) Paragraph (1) does not apply to an unsolicited real time communication unless—

• (a) it is made from a place outside the United Kingdom; and

• (b) it relates to an overseas scheme.

• (3) For the purposes of paragraph (1)(b)—

• (a) if the conditions set out in paragraph (4)(a), (b), (c) and (d) are met, a communication directed from a place inside the United Kingdom is to be regarded as directed only at persons outside the United Kingdom;

• (b) if the conditions set out in paragraph (4)(c) and (d) are met, a communication directed from a place outside the United Kingdom is to be regarded as directed only at persons outside the United Kingdom;

• (c) in any other case where one or more of the conditions in paragraph (4)(a) to (e) are met, that fact shall be taken into account in determining whether the communication is to be regarded as directed only at persons outside the United Kingdom (but a communication may still be regarded as directed only at persons outside the United Kingdom even if none of the conditions in paragraph (4) is met).

• (4) The conditions are that—

• (a) the communication is accompanied by an indication that it is directed only at persons outside the United Kingdom;

• (b) the communication is accompanied by an indication that it must not be acted upon by persons in the United Kingdom;

• (c) the communication is not referred to in, or directly accessible from, any other communication which is made to a person or directed at persons in the United Kingdom by or on behalf of the same person;

• (d) there are in place proper systems and procedures to prevent recipients in the United Kingdom (other than those to whom the communication might otherwise lawfully have been made or directed) acquiring from the person directing the communication, a close relative of his or a company in the same group, units in the scheme to which the communication relates;

• (e) the communication is included in—

• (i) a web site, newspaper, journal, magazine or periodical publication which is principally accessed in or intended for a market outside the United Kingdom;

• (ii) a radio or television broadcast or teletext service transmitted principally for reception outside the United Kingdom.

• (5) For the purposes of paragraph (1)(b), a communication may be treated as directed only at persons outside the United Kingdom even if—

• (a) it is also directed, for the purposes of article 14(1)(b), at investment professionals falling within article 14(5) (but disregarding paragraph (6) of that article for this purpose);

• (b) it is also directed, for the purposes of article 22(1)(b), at high net worth persons to whom article 22 applies (but disregarding paragraph (2)(e) of that article for this purpose).

• (6) Where a communication falls within paragraph (5)—

• (a) the condition in paragraph (4)(a) is to be construed as requiring an indication that the communication is directed only at persons outside the United Kingdom or persons having professional experience in matters relating to investments or high net worth persons (as the case may be);

• (b) the condition in paragraph (4)(b) is to be construed as requiring an indication that the communication must not be acted upon by persons in the United Kingdom or by persons who do not have professional experience in matters relating to investments or who are not high net worth persons (as the case may be).

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Solicited real time communications from overseas

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The scheme promotion restriction does not apply to any solicited real time communication which is made from outside the United Kingdom and which relates to units in an overseas scheme.

Communications from overseas to previously overseas customers

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• (1) The scheme promotion restriction does not apply to a non-real time or unsolicited real time communication which—

• (a) is made from outside the United Kingdom by an authorised person to a previously overseas customer of his; and

• (b) relates to units in an overseas scheme.

• (2) In this article—

• “previously overseas customer” means a person with whom the authorised person has done business within the period of twelve months ending with the day on which the communication was made (“the earlier business”) and where—at the time that the earlier business was done, the customer was neither resident in the United Kingdom nor had a place of business there; orat the time the earlier business was done, the authorised person had on a former occasion done business with the customer, being business of the same description as the business to which the communication relates, and on that former occasion the customer was neither resident in the United Kingdom nor had a place of business there.

• (3) For the purposes of this article, an authorised person has done business with a customer if, in the course of his overseas business, he has—

• (a) effected a transaction, or arranged for a transaction to be effected, with the customer in respect of units in an overseas scheme; or

• (b) given, outside the United Kingdom, any advice on the merits of the customer buying or selling units in an overseas scheme.

PART III — OTHER EXEMPTIONS

Follow up non-real time communications and solicited real time communications

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• (1) Where an authorised person makes or directs a communication (“the first communication”) which is exempt from the scheme promotion restriction because, in compliance with the requirements of another provision of this Order, it is accompanied by certain indications or contains certain information, then the scheme promotion restriction does not apply to any subsequent communication which complies with the requirements of paragraph (2).

• (2) The requirements of this paragraph are that the subsequent communication—

• (a) is a non-real time communication or a solicited real time communication;

• (b) is made by the same person who made the first communication;

• (c) is made to a recipient of the first communication;

• (d) relates to the same unregulated scheme as the first communication; and

• (e) is made within 12 months of the recipient receiving the first communication.

• (3) A communication made or directed before this Order comes into force is to be treated as a first communication falling within paragraph (1) if it would have fallen within that paragraph had it been made or directed after this Order comes into force.

Introductions

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• (1) If the requirements of paragraph (2) are met, the scheme promotion restriction does not apply to any real time communication which is made with a view to or for the purposes of introducing the recipient to—

• (a) an authorised person who carries on one or more relevant scheme activities in relation to units in unregulated schemes; or

• (b) a person who is exempt, as a result of an exemption order made under section 38(1) of the Act, in relation to one or more relevant scheme activities.

• (2) The requirements of this paragraph are that—

• (a) the maker of the communication (“A”) is not a close relative of, nor a member of the same group as, the person to whom the introduction is, or is to be, made;

• (b) A does not carry on business in relevant scheme activities in relation to units in unregulated schemes;

• (c) A does not receive from any person other than the recipient any pecuniary reward or other advantage arising out of his making the introduction; and

• (d) it is clear in all the circumstances that the recipient, in his capacity as an investor, is not seeking and has not sought advice from A as to the merits of participating in an unregulated scheme (or, if the client has sought such advice, A has declined to give it, but has recommended that the recipient seek such advice from an authorised person specialising in that kind of investment).

Generic promotions

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The scheme promotion restriction does not apply to any communication which—

• (a) does not relate to units of a particular unregulated scheme identified (directly or indirectly) in the communication; and

• (b) does not identify (directly or indirectly) any person who operates a collective investment scheme or sells units.

Investment professionals

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• (1) The scheme promotion restriction does not apply to any communication which—

• (a) is made only to recipients whom the person making the communication believes on reasonable grounds to be investment professionals; or

• (b) may reasonably be regarded as directed only at such recipients.

• (2) For the purposes of paragraph (1)(b), if all the conditions set out in paragraph (4)(a) to (c) are met in relation to the communication, it is to be regarded as directed only at investment professionals.

• (3) In any other case in which one or more of the conditions set out in paragraph (4)(a) to (c) are met, that fact shall be taken into account in determining whether the communication is directed only at investment professionals (but a communication may still be regarded as so directed even if none of the conditions in paragraph (4) is met).

• (4) The conditions are that—

• (a) the communication is accompanied by an indication that it is directed at persons having professional experience of participating in unregulated schemes and that the units to which the communication relates are available only to such persons;

• (b) the communication is accompanied by an indication that persons who do not have professional experience in participating in unregulated schemes should not rely on it;