The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

• (b) a person whilst acting in the capacity of director, officer or employee of a person falling within sub-paragraph (a) being a person whose responsibilities when acting in that capacity involve him in the business referred to in that sub-paragraph;

• (c) any person to whom the communication may otherwise lawfully be made.

Certified high net worth individuals

48

• (1) If the requirements of paragraphs (4) and (7) are met, the financial promotion restriction does not apply to any communication which—

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

• (b) is made to an individual whom the person making the communication believes on reasonable grounds to be a ... high net worth individual, and

• (c) relates only to one or more investments falling within paragraph (8).

• (2) “High net worth individual” means an individual—

• (a) who has completed and signed, within the period of twelve months ending with the day on which the communication is made, a statement complying with Part 1 of Schedule 5; and

• (b) whose completion of that statement indicates that they satisfy the conditions set out in the statement to be classified as a high net worth individual.

• (3) The validity of a statement completed and signed for the purposes of paragraph (2) is not affected by a defect in the form or wording of the statement, provided that the defect does not alter the statement's meaning and that the words shown in bold type in Part I of Schedule 5 are so shown in the statement.

• (4) The requirements of this paragraph are that either the communication is accompanied by the giving of a warning and information in accordance with paragraphs (5) , (5A) and (6) or where, because of the nature of the communication, this is not reasonably practicable,—

• (a) a warning in accordance with paragraph (5) is given to the recipient orally at the beginning of the communication together with an indication that he will receive the warning in legible form and that, before receipt of that warning, he should consider carefully any decision to engage in investment activity to which the communication relates; and

• (b) a warning and information in accordance with paragraphs (5) , (5A) and (6) (d) to (h) is sent to the recipient of the communication within two business days of the day on which the communication is made.

• (5) The warning must be in the following terms—

The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.

High net worth companies, unincorporated associations etc.

49

• (1) The financial 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 persons to whom paragraph (2) applies; or

• (b) may reasonably be regarded as directed only at persons to whom paragraph (2) applies.

• (2) This paragraph applies to—

• (a) any body corporate which has, or which is a member of the same group as an undertaking which has, a called-up share capital or net assets of not less than—

• (i) if the body corporate has more than 20 members or is a subsidiary undertaking of an undertaking which has more than 20 members, £500,000;

• (ii) otherwise, £5 million;

• (b) any unincorporated association or partnership which has net assets of not less than £5 million;

• (c) the trustee of a high value trust;

• (d) any person (“A”) whilst acting in the capacity of director, officer or employee of a person (“B”) falling within any of sub-paragraphs (a) to (c) where A's responsibilities, when acting in that capacity, involve him in B's engaging in investment activity;

• (e) any person to whom the communication may otherwise lawfully be made.

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

• (a) if all the conditions set out in paragraph (4)(a) to (c) are met, the communication is to be regarded as directed at persons to whom paragraph (2) applies;

• (b) in any other case in which one or more of those conditions are met, that fact is to be taken into account in determining whether the communication is directed at persons to whom paragraph (2) applies (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 includes an indication of the description of persons to whom it is directed and an indication of the fact that the controlled investment or controlled activity to which it relates is available only to such persons;

• (b) the communication includes an indication that persons of any other description should not act upon it;

• (c) there are in place proper systems and procedures to prevent recipients other than persons to whom paragraph (2) applies engaging in the investment activity to which the communication relates with the person directing the communication, a close relative of his or a member of the same group.

• (5) “Called-up share capital” has the meaning given in the 2006 Act (see section 547).

• (6) “High value trust” means a trust where the aggregate value of the cash and investments which form part of the trust's assets (before deducting the amount of its liabilities)—

• (a) is £10 million or more; or

• (b) has been £10 million or more at anytime during the year immediately preceding the date on which the communication in question was first made or directed.

• (7) “Net assets” has the meaning given by section 831 of the 2006 Act.

• (8) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

Sophisticated investors

50

• (1) “Certified sophisticated investor”, in relation to any description of investment, means a person—

• (a) who has a current certificate in writing or other legible form signed by an authorised person to the effect that he is sufficiently knowledgeable to understand the risks associated with that description of investment; and

• (b) who has signed, within the period of twelve months ending with the day on which the communication is made, a statement in the following terms:

• (1A) The validity of a statement signed in accordance with paragraph (1)(b) is not affected by a defect in the wording of the statement, provided that the defect does not alter the statement's meaning.

• (2) If the requirements of paragraph (3) are met, the financial promotion restriction does not apply to any communication which—

• (a) is made to a certified sophisticated investor;

• (b) does not invite or induce the recipient to engage in investment activity with the person who has signed the certificate referred to in paragraph (1)(a); and

• (c) relates only to a description of investment in respect of which that investor is certified.

• (3) The requirements of this paragraph are that the communication is accompanied by an indication—

• (a) that it is exempt from the general restriction (in section 21 of the Act) on the communication of invitations or inducements to engage in investment activity on the ground that it is made to a certified sophisticated investor;

• (b) of the requirements that must be met for a person to qualify as a certified sophisticated investor;

• (c) that the content of the communication has not been approved by an authorised person and that such approval is, unless this exemption or any other exemption applies, required by section 21 of the Act;

• (d) that reliance on the communication for the purpose of engaging in any investment activity may expose the individual to a significant risk of losing all of the property invested or of incurring additional liability;

• (e) that any person who is in any doubt about the investment to which the communication relates should consult an authorised person specialising in advising on investments of the kind in question.

• (4) For the purposes of paragraph (1)(a), a certificate is current if it is signed and dated not more than three years before the date on which the communication is made.

Self-certified sophisticated investors

50A

• (1) “Self-certified sophisticated investor” means an individual—

• (a) who has completed and signed, within the period of twelve months ending with the day on which the communication is made, a statement complying with Part 2 of Schedule 5; and

• (b) whose completion of that statement indicates that they satisfy the conditions set out in the statement to be classified as a self-certified sophisticated investor.

• (2) The validity of a statement completed and signed for the purposes of paragraph (1) is not affected by a defect in the form or wording of the statement, provided that the defect does not alter the statement's meaning and that the words shown in bold type in Part II of Schedule 5 are so shown in the statement.

• (3) If the requirements of paragraphs (4) and (7) are met, the financial promotion restriction does not apply to any communication which—

• (a) is made to an individual whom the person making the communication believes on reasonable grounds to be a self-certified sophisticated investor; and

• (b) relates only to one or more investments falling within paragraph (8).

• (4) The requirements of this paragraph are that either the communication is accompanied by the giving of a warning and information in accordance with paragraphs (5) , (5A) and (6) or where, because of the nature of the communication this is not reasonably practicable—

• (a) a warning in accordance with paragraph (5) is given to the recipient orally at the beginning of the communication together with an indication that he will receive the warning in legible form and that, before receipt of that warning, he should consider carefully any decision to engage in investment activity to which the communication relates; and

• (b) a warning and information in accordance with paragraphs (5) , (5A) and (6) (d) to (h) is sent to the recipient of the communication within two business days of the day on which the communication is made.

• (5) The warning must be in the following terms—

The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.

Associations of high net worth or sophisticated investors

51

• (1) The financial promotion restriction does not apply to any non-real time communication or solicited real time communication which—

• (a) is made to an association, or to a member of an association, the membership of which the person making the communication believes on reasonable grounds comprises wholly or predominantly persons who are—

• (i) ... high net worth individuals within the meaning of article 48;

• (ii) high net worth persons falling within article 49(2)(a) to (d);

• (iii) certified or self-certified sophisticated investors within the meaning of article 50 or 50A; and

• (b) relates only to an investment under the terms of which a person cannot incur a liability or obligation to pay or contribute more than he commits by way of investment.

• (2) The exemption in paragraph (1) does not apply if the communication relates to a qualifying cryptoasset.

Common interest group of a company

52

• (1) “Common interest group”, in relation to a company, means an identified group of persons who at the time the communication is made might reasonably be regarded as having an existing and common interest with each other and that company in—

• (a) the affairs of the company; and

• (b) what is done with the proceeds arising from any investment to which the communication relates.

• (2) If the requirements of paragraphs (3) and either (4) or (5) are met, the financial promotion restriction does not apply to any communication which—

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

• (b) is made only to persons who are members of a common interest group of a company, or may reasonably be regarded as directed only at such persons; and

• (c) relates to investments falling within paragraph 14, 15 or 15A of Schedule 1 which are issued, or to be issued, by that company.

• (3) The requirements of this paragraph are that the communication is accompanied by an indication—

• (a) that the directors of the company (or its promoters named in the communication) have taken all reasonable care to ensure that every statement of fact or opinion included in the communication is true and not misleading given the form and context in which it appears;

• (b) that the directors of the company (or its promoters named in the communication) have not limited their liability with respect to the communication; and

• (c) that any person who is in any doubt about the investment to which the communication relates should consult an authorised person specialising in advising on investments of the kind in question.

• (4) The requirements of this paragraph are that the communication is accompanied by an indication—

• (a) that the directors of the company (or its promoters named in the communication) have taken all reasonable care to ensure that any person belonging to the common interest group (and his professional advisers) can have access, at all reasonable times, to all the information that he or they would reasonably require, and reasonably expect to find, for the purpose of making an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the company and of the rights attaching to the investments in question; and

• (b) describing the means by which such information can be accessed.

• (5) The requirements of this paragraph are that the communication is accompanied by an indication that any person considering subscribing for the investments in question should regard any subscription as made primarily to assist the furtherance of the company's objectives (other than any purely financial objectives) and only secondarily, if at all, as an investment.

• (6) For the purposes of paragraph (2)(b)—

• (a) if all the conditions set out in paragraph (7) are met, the communication is to be regarded as directed at persons who are members of the common interest group;

• (b) in any other case in which one or more of those conditions are met, that fact shall be taken into account in determining whether the communication is directed at persons who are members of the common interest group (but a communication may still be regarded as directed only at such persons even if none of the conditions in paragraph (7) is met).

• (7) The conditions are that—

• (a) the communication is accompanied by an indication that it is directed at persons who are members of the common interest group and that any investment or activity to which it relates is available only to such persons;

• (b) the communication is accompanied by an indication that it must not be acted upon by persons who are not members of the common interest group;

• (c) there are in place proper systems and procedures to prevent recipients other than members of the common interest group engaging in the investment activity to which the communication relates with the person directing the communication, a close relative of his or a member of the same group.

• (8) Persons are not to be regarded as having an interest of the kind described in paragraph (1) if the only reason why they would be so regarded is that—

• (a) they will have such an interest if they become members or creditors of the company;

• (b) they all carry on a particular trade or profession; or

• (c) they are persons with whom the company has an existing business relationship, whether by being its clients, customers, contractors, suppliers or otherwise.

Settlors, trustees and personal representatives

53

The financial promotion restriction does not apply to any communication which is made between—

• (a) a person when acting as a settlor or grantor of a trust, a trustee or a personal representative; and

• (b) a trustee of the trust, a fellow trustee or a fellow personal representative (as the case may be),

if the communication is made for the purposes of the trust or estate.

Beneficiaries of trust, will or intestacy

54

The financial promotion restriction does not apply to any communication which is made—

• (a) between a person when acting as a settlor or grantor of a trust, trustee or personal representative and a beneficiary under the trust, will or intestacy; or

• (b) between a beneficiary under a trust, will or intestacy and another beneficiary under the same trust, will or intestacy,

if the communication relates to the management or distribution of that trust fund or estate.

Communications by members of professions

55

• (1) The financial promotion restriction does not apply to a real time communication (whether solicited or unsolicited) which—

• (a) is made by a person (“P”) who carries on a regulated activity to which the general prohibition does not apply by virtue of section 327 of the Act; and

• (b) is made to a recipient who has, prior to the communication being made, engaged P to provide professional services,

where the controlled activity to which the communication relates is an excluded activity which would be undertaken by P for the purposes of, and incidental to, the provision by him of professional services to or at the request of the recipient.

• (2) “Professional services” has the meaning given in section 327 of the Act.

• (3) An “excluded activity” is an activity to which the general prohibition would apply but for the application of—

• (a) section 327 of the Act; or

• (b) article 67 of the Regulated Activities Order.

Non-real time communication by members of professions

55A

• (1) The financial promotion restriction does not apply to a non-real time communication which is—

• (a) made by a person (“P”) who carries on Part XX activities; and

• (b) limited to what is required or permitted by paragraphs (2) and (3).

• (2) The communication must be in the following terms— “ This [firm/company] is not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment and consumer credit-related and claims management-related services to clients because we are members of [relevant designated professional body]. We can provide these investment and consumer credit-related services if they are an incidental part of the professional services we have been engaged to provide. ”

• (3) The communication may in addition set out the Part XX activities which P is able to offer to his clients, provided it is clear that these are the investment and consumer credit-related and claims management-related services to which the statement in paragraph (2) relates.

• (4) The validity of a communication made in accordance with paragraph (2) is not affected by a defect in the wording of it provided that the defect does not alter the communication's meaning.

• (5) “Part XX activities” means the regulated activities to which the general prohibition does not apply when they are carried on by P by virtue of section 327 of the Act.

Remedy following report by Parliamentary Commissioner for Administration

56

The financial promotion restriction does not apply to any communication made or directed by a person for the purpose of enabling any injustice, stated by the Parliamentary Commissioner for Administration in a report under section 10 of the Parliamentary Commissioner Act 1967 to have occurred, to be remedied with respect to the recipient.

Persons placing promotional material in particular publications

57

The financial promotion restriction does not apply to any communication received by a person who receives the publication in which the communication is contained because he has himself placed an advertisement in that publication.

Acquisition of interest in premises run by management companies

58

• (1) “Management company” means a company established for the purpose of—

• (a) managing the common parts or fabric of premises used for residential or business purposes; or

• (b) supplying services to such premises.

• (2) The financial promotion restriction does not apply to any non-real time communication or solicited real time communication if it relates to an investment falling within paragraph 14 of Schedule 1 which—

• (a) is issued, or to be issued, by a management company; and

• (b) is to be acquired by any person in connection with the acquisition of an interest in the premises in question.

Annual accounts and directors' report

59

• (1) If the requirements in paragraphs (2) to (5) are met, the financial promotion restriction does not apply to any communication by a body corporate (other than an open-ended investment company) which—

• (a) consists of, or is accompanied by, the whole or any part of the annual accounts of a body corporate (other than an open-ended investment company); or

• (b) is accompanied by any report which is prepared and approved by the directors of such a body corporate under—

• (ai) sections 414A and 414D of the 2006 Act; or

• (i) sections 415 and 419 of the 2006 Act ...

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (a) does not contain any invitation to persons to underwrite, subscribe for, or otherwise acquire or dispose of, a controlled investment; and

• (b) does not advise persons to engage in any of the activities within sub-paragraph (a).

• (3) The requirements of this paragraph are that the communication does not contain any invitation to persons to—

• (a) effect any transaction with the body corporate (or with any named person) in the course of that body's (or person's) carrying on of any activity falling within any of paragraphs 3 to 11 11A of Schedule 1; or

• (b) make use of any services provided by that body corporate (or by any named person) in the course of carrying on such activity.

• (4) The requirements of this paragraph are that the communication does not contain any inducement relating to an investment other than one issued, or to be issued, by the body corporate (or another body corporate in the same group) which falls within—

• (a) paragraph 14, 15 or 15A of Schedule 1; or

• (b) paragraph 17 or 18 of that Schedule, so far as relating to any investments within sub-paragraph (a).

• (5) The requirements of this paragraph are that the communication does not contain any reference to—

• (a) the price at which investments issued by the body corporate have in the past been bought or sold; or

• (b) the yield on such investments,

unless it is also accompanied by an indication that past performance cannot be relied on as a guide to future performance.

• (6) For the purposes of paragraph (5)(b), a reference, in relation to an investment, to earnings, dividend or nominal rate of interest payable shall not be taken to be a reference to the yield on the investment.

• (7) “Annual accounts” means—

• (a) accounts produced by virtue of Part 15 of the 2006 Act (or of that Part as applied by virtue of any other enactment);

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

• (c) a summary financial statement prepared under section 426 of the 2006 Act;

• (d) accounts produced in accordance with Chapter 3 of Part 5 of the Overseas Companies Regulations 2009 and filed with the registrar under section 441 of the 2006 Act as applied and modified by regulation 40 of those Regulations;

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Participation in employee share schemes

60

• (1) The financial promotion restriction does not apply to any communication by a person (“C”), a member of the same group as C or a relevant trustee where the communication is for the purposes of an employee share scheme and relates to any of the following investments issued, or to be issued, by C—

• (a) investments falling within paragraph 14, 15 or 15A of Schedule 1;

• (b) investments falling within paragraph 17 or 18 so far as relating to any investments within sub-paragraph (a); or

• (c) investments falling within paragraph 21 or 27 so far as relating to any investments within sub-paragraph (a) or (b).

• (2) “Employee share scheme”, in relation to any investments issued by C, means arrangements made or to be made by C or by a person in the same group as C to enable or facilitate—

• (a) transactions in the investments specified in paragraphs (1)(a) or (b) between or for the benefit of—

• (i) the bona fide employees or former employees of C or of another member of the same group as C;

• (ii) the wives, husbands, widows, widowers, civil partners, surviving civil partners or children or step-children under the age of eighteen of such employees or former employees; or

• (b) the holding of those investments by, or for the benefit of, such persons.

• (3) “Relevant trustee” means a person who, in pursuance of an actual or proposed employee share scheme, holds as trustee or will hold as trustee investments issued by C.

Sale of goods and supply of services

61

• (1) In this article—

• “supplier” means a person whose main business is to sell goods or supply services and not to carry on controlled activities or controlled claims management activities falling within any of paragraphs 3 to 7, 10BA and 10BB , 10BB and 11A of Schedule 1 and, where the supplier is a member of a group, also means any other member of that group;

• “customer” means a person, other than an individual, to whom a supplier sells goods or supplies services, or agrees to do so, and, where the customer is a member of a group, also means any other member of that group;

• “a related sale or supply” means a sale of goods or supply of services to the customer otherwise than by the supplier, but for or in connection with the same purpose as the sale or supply mentioned above.

• (2) The financial promotion restriction does not apply to any non-real time communication or any solicited real time communication made by a supplier to a customer of his for the purposes of, or in connection with, the sale of goods or supply of services or a related sale or supply.

• (3) But the exemption in paragraph (2) does not apply if the communication relates to—

• (a) a qualifying contract of insurance or units in a collective investment scheme; ...

• (b) investments falling within paragraph 27 of Schedule 1 so far as relating to investments within paragraph (a).

• (c) a relevant credit agreement (within the meaning of paragraph 28 of Schedule 1); ...

• (d) a consumer hire agreement (within the meaning of paragraph 28 of Schedule 1). ; or

• (e) a qualifying cryptoasset.

• (4) The exemption in paragraph (2) also does not apply if the communication is made by a person carrying on, or in relation to, an activity of a kind specified in paragraph 4B of Schedule 1 (credit broking).

Sale of body corporate

62

• (1) The financial promotion restriction does not apply to any communication by, or on behalf of, a body corporate, a partnership, a single individual or a group of connected individuals which relates to a transaction falling within paragraph (2).

• (2) A transaction falls within this paragraph if—

• (a) it is one to acquire or dispose of shares in a body corporate other than an open-ended investment company, or is entered into for the purposes of such an acquisition or disposal; and

• (b) either—

• (i) the conditions set out in paragraph (3) are met; or

• (ii) those conditions are not met, but the object of the transaction may nevertheless reasonably be regarded as being the acquisition of day to day control of the affairs of the body corporate.

• (3) The conditions mentioned in paragraph (2)(b) are that—

• (a) the shares consist of or include 50 per cent or more of the voting shares in the body corporate; or

• (b) the shares, together with any already held by the person acquiring them, consist of or include at least that percentage of such shares; and

• (c) in either case, the acquisition or disposal is, or is to be, between parties each of whom is a body corporate, a partnership, a single individual or a group of connected individuals.

• (4) “A group of connected individuals” means—

• (a) in relation to a party disposing of shares in a body corporate, a single group of persons each of whom is—

• (i) a director or manager of the body corporate;

• (ii) a close relative of any such director or manager; or

• (iii) a person acting as trustee for, or nominee of, any person falling within paragraph (i) or (ii); and

• (b) in relation to a party acquiring shares in a body corporate, a single group of of persons each of whom is—

• (i) a person who is or is to be a director or manager of the body corporate;

• (ii) a close relative of any such person; or

• (iii) a person acting as trustee for or nominee of any person falling within paragraph (i) or (ii).

• (5) “Voting shares” in relation to a body corporate, means shares carrying voting rights attributable to share capital which are exercisable in all circumstances at any general meeting of that body corporate.

Takeovers of relevant unlisted companies: interpretation

63

• (1) In this article and in articles 64, 65 and 66, a “relevant unlisted company”, in relation to a takeover offer, means a company which is an unlisted company at the time that the offer is made and which has been an unlisted company throughout the period of ten years immediately preceding the date of the offer.

• (2) In this article and in articles 64, 65 and 66, references to a takeover offer for a relevant unlisted company are references to an offer which meets the requirements of Part I of Schedule 4 and which is an offer—

• (a) for all the shares in, or all the shares comprised in the equity or non-equity share capital of, a relevant unlisted company (other than any shares already held by or on behalf of the person making the offer); or

• (b) for all the debentures of such a company (other than debentures already held by or on behalf of the person making the offer).

• (3) Shares in or debentures of an unlisted company are to be regarded as being held by or on behalf of the person making the offer if the person who holds them, or on whose behalf they are held, has agreed that an offer should not be made in respect of them.

Takeovers of relevant unlisted companies: interpretation

64

• (1) If the requirements of paragraphs (2) and (3) are met, the financial promotion restriction does not apply to any communication which is communicated in connection with a takeover offer for a relevant unlisted company.

• (2) The requirements of this paragraph are that the communication is accompanied by the material listed in Part II of Schedule 4.

• (3) The requirements of this paragraph are that the material listed in Part III of Schedule 4 is available at a place in the United Kingdom at all times during normal office hours for inspection free of charge.

Takeovers of relevant unlisted companies: interpretation

65

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

• (a) is communicated at the same time as, or after, a takeover offer for a relevant unlisted company is made; and

• (b) relates to investments falling within paragraph 17 or 18 of Schedule 1 so far as relating to the shares in or debentures of the unlisted company which are the subject of the offer.

Takeovers of relevant unlisted companies

66

The financial promotion restriction does not apply to any communication made in connection with a takeover offer for a relevant unlisted company which is a form of application for—

• (a) shares in or debentures of the unlisted company; or

• (b) investments falling within paragraphs 17 or 18 of Schedule 1 so far as relating to the shares in or debentures of the company which are the subject of the offer.

Promotions required or permitted by market rules

67

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

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

• (b) relates to an investment which falls within any of paragraphs 14 to 18 of Schedule 1 and which is permitted to be traded or dealt in on a relevant market; and

• (c) is required or permitted to be communicated by—

• (i) the rules of the relevant market;

• (ii) a body which regulates the market; or

• (iii) a body which regulates offers or issues of investments to be traded on such a market.

• (2) “Relevant market” means a market which—

• (za) is a relevant UK market;

• (a) meets the criteria specified in Part I of Schedule 3; or

• (b) is specified in, or established under the rules of an exchange specified in, Part ... III of that Schedule.

Promotions in connection with admission to certain EEA markets

68

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

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

• (b) which a relevant UK market or relevant EEA market requires to be communicated before an investment can be admitted to trading on that market;

• (c) which, if it were included in a prospectus issued in accordance with regulated market admission rules, would be required to be communicated by those rules; and

• (d) which is not accompanied by any information other than information which is required or permitted to be published by the rules of that market.

• (2) In this article “relevant EEA market” means any market on which investments can be traded or dealt in and which—

• (a) meets the criteria specified in Part I of Schedule 3; ...

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

Promotions of securities already admitted to certain markets

69

• (1) In this article—

• “relevant investment” means any investment falling within—paragraph 14, 15 or 15A of Schedule 1; orparagraph 17 or 18 of that Schedule so far as relating to any investment mentioned in sub-paragraph (a);

• “relevant market” means any market on which investments can be traded and which— is a relevant UK market; meets the criteria specified in Part I of Schedule 3; oris specified in, or established under, the rules of an exchange specified in, Part ... III of that Schedule.

• (2) If the requirements of paragraph (3) are met, the financial promotion restriction does not apply to any communication which—

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

• (b) is communicated by a body corporate (“A”), other than an open-ended investment company; and

• (c) relates only to relevant investments issued, or to be issued, by A or by another body corporate in the same group,

if relevant investments issued by A or by any such body corporate are permitted to be traded on a relevant market.

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

• (a) is not, and is not accompanied by, an invitation to engage in investment activity;

• (b) is not, and is not accompanied by, an inducement relating to an investment other than one issued, or to be issued, by A (or another body corporate in the same group);

• (c) is not, and is not accompanied by, an inducement relating to a relevant investment which refers to—

• (i) the price at which relevant investments have been bought or sold in the past, or

• (ii) the yield on such investments,

unless the inducement also contains an indication that past performance cannot be relied on as a guide to future performance.

• (4) For the purposes of this article, an investment falling within paragraph 17 or 18 of Schedule 1 is treated as issued by the person (“P”) who issued the investment in respect of which the investment confers rights if it is issued by—

• (a) an undertaking in the same group as P; or

• (b) a person acting on behalf of, or pursuant to, arrangements made with P.

• (5) For the purposes of paragraph (3)(a), “engaging in investment activity” has the meaning given in section 21(8) of the Act; and for the purposes of paragraph (3)(c)(ii), a reference, in relation to an investment, to earnings, dividend or nominal rate of interest payable shall not be taken to be a reference to the yield on the investment.

Promotions included in listing particulars etc.

70

• (1) The financial promotion restriction does not apply to any non-real time communication which is included in—

• (a) listing particulars;

• (b) supplementary listing particulars;

• (c) a prospectus or supplementary prospectus published in accordance with regulated market admission rules;

• (d) any other document required or permitted to be published—

• (i) by listing rules under Part 6 of the Act, or

• (ii) by regulated market admission rules,

except an advertisement as defined in regulation 3 of the Public Offers and Admissions to Trading Regulations 2024;

• (e) a qualifying cryptoasset disclosure document or a supplementary disclosure document as defined by regulation 6 (“qualifying cryptoasset disclosure document” and “supplementary disclosure document”) of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In this article “listing particulars”, and “listing rules” have the meaning given by Part VI of the Act.

Material relating to prospectus for public offer of unlisted securities

71

• (1) The financial promotion restriction does not apply to any non-real time communication relating to a prospectus or supplementary prospectus where the only reason for considering it to be an invitation or inducement is that it does one or more of the following—

• (a) it states the name and address of the person by whom the transferable securities to which the prospectus or supplementary prospectus relates are to be offered;

• (b) it gives other details for contacting that person;

• (c) it states the nature and the nominal value of the transferable securities to which the prospectus or supplementary prospectus relates, the number offered and the price at which they are offered;

• (d) it states that a prospectus or supplementary prospectus is or will be available (and, if it is not yet available, when it is expected to be);

• (e) it gives instructions for obtaining a copy of the prospectus or supplementary prospectus.

• (2) In this article—

• (a) “transferable securities” has the meaning given in regulation 4 of the Public Offers and Admissions to Trading Regulations 2024;

• (b) references to a prospectus or supplementary prospectus are references to a prospectus or supplementary prospectus which is published in accordance with regulated market admission rules.

Pension products offered by employers

72

• (1) If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any communication which is made by an employer to an employee in relation to a group personal pension scheme or a stakeholder pension scheme.

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

• (a) the employer will make a contribution to the group personal pension scheme or stakeholder pension scheme to which the communication relates in the event of the employee becoming a member of the scheme and the communication contains a statement informing the employee of this;

• (b) the employer has not received, and will not receive, any direct financial benefit as a result of making the communication;

• (c) the employer notifies the employee in writing prior to the employee becoming a member of the scheme of the amount of the contribution that the employer will make to the scheme in respect of that employee or the basis on which the contribution will be calculated; and

• (d) in the case of a non-real time communication, the communication contains, or is accompanied by, a statement informing the employee of his right to seek advice from an authorised person or an appointed representative.

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

• (4) In this article—

• “group personal pension scheme” means arrangements administered on a group basis under a personal pension scheme and which are available to employees of the same employer or of employers within a group;

• “personal pension scheme” means a personal pension scheme as defined in section 1 of the Pension Schemes Act 1993 and which has been approved by the Commissioners of Inland Revenue under Chapter XIV of the Income and Corporation Taxes Act 1988 ;

• “stakeholder pension scheme” has the meaning given by section 1 of the Welfare Reform and Pensions Act 1999 .

Advice centres

73

• (1) If the requirements of paragraph (2) are met, the financial promotion restriction does not apply to any communication which is made by a person in the course of carrying out his duties as an adviser for, or employee of, an advice centre.

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

• (a) qualifying credit;

• (b) rights under, or rights to or interests in rights under, qualifying contracts of insurance; ...

• (c) a child trust fund.;

• (d) a regulated home reversion plan; ...

• (e) a regulated home purchase plan; or

• (f) a regulated sale and rent back agreement; or

• (g) a controlled claims management activity.

• (3) In this article—

• “adequate professional indemnity insurance”, in relation to an advice centre, means insurance providing cover that is adequate having regard to—the claims record of the centre;the financial resources of the centre; andthe right of clients of the centre to be compensated for loss arising from the negligent provision of financial advice;

• “advice centre” means a body which—gives advice which is free and in respect of which the centre does not receive any fee, commission or other reward;provides debt advice as its principal financial services activity; andin the case of a body which is not part of a local authority, holds adequate professional indemnity insurance or a guarantee providing comparable cover;

• “child trust fund” has the meaning given by section 1(2) of the Child Trust Funds Act 2004 ;

• “local authority” has the meaning given in article 2 of the Financial Services and Markets Act 2000 (Exemption) Order 2001 .

Revocation

74

The Orders specified in the first column of Schedule 6 are revoked to the extent specified in the third column of that Schedule.

SCHEDULE 1

PART I — Controlled Activities

Accepting deposits

1

Accepting deposits is a controlled activity if—

• (a) money received by way of deposit is lent to others; or

• (b) any other activity of the person accepting the deposit is financed wholly, or to a material extent, out of the capital of or interest on money received by way of deposit,

and the person accepting the deposit holds himself out as accepting deposits on a day to day basis.

Effecting or carrying out contracts of insurance

2

• (1) Effecting a contract of insurance as principal is a controlled activity.

• (2) Carrying out a contract of insurance as principal is a controlled activity.

• (3) There is excluded from sub-paragraph (1) or (2) the effecting or carrying out of a contract of insurance of the kind described in article 12 of the Regulated Activities Order by a person who does not otherwise carry on an activity falling within those sub-paragraphs.

Dealing in securities and contractually based investments

3

• (1) Buying, selling, subscribing for or underwriting securities , structured deposits , qualifying cryptoassets or contractually based investments ... as principal or agent is a controlled activity.

• (2) A person does not carry on the activity in sub-paragraph (1) by accepting an instrument creating or acknowledging indebtedness in respect of any loan, credit, guarantee or other similar financial accommodation or assurance which he has made, granted or provided.

• (3) The reference in sub-paragraph (2) to a person accepting an instrument includes a reference to a person becoming a party to an instrument otherwise than as a debtor or a surety.

Arranging deals in investments

4

• (1) Making arrangements for another person (whether as principal or agent) to buy, sell, subscribe for or underwrite a particular investment which is—

• (a) a security;

• (aa) a structured deposit;

• (ab) a qualifying cryptoasset;

• (b) a contractually based investment; or

• (c) an investment of the kind specified by paragraph 24, or paragraph 27 so far as relevant to that paragraph,

is a controlled activity.

• (2) Making arrangements with a view to a person who participates in the arrangements buying, selling, subscribing for or underwriting investments falling within sub-paragraph (1)(a), (aa), (ab), (b) or (c) (whether as principal or agent) is a controlled activity.

• (3) A person does not carry on an activity falling within paragraph (2) merely by providing means by which one party to a transaction (or potential transaction) is able to communicate with other such parties.

• (4) This paragraph does not apply to the activity specified by paragraph 7C (qualifying cryptoasset staking).

Managing investments

5

Managing assets belonging to another person, in circumstances involving the exercise of discretion, is a controlled activity if—

• (a) the assets consist of or include any investment which is a security , structured deposit , a qualifying cryptoasset or a contractually based investment; or

• (b) the arrangements for their management are such that the assets may consist of or include such investments, and either the assets have at any time since 29th April 1988 done so, or the arrangements have at any time (whether before or after that date) been held out as arrangements under which the assets would do so.

Safeguarding and administering investments

6

• (1) The activity consisting of both—

• (a) the safeguarding of assets belonging to another; and

• (b) the administration of those assets,

or arranging for one or more other persons to carry on that activity, is a controlled activity if either the condition in paragraph (a) or (b) of sub-paragraph (2) is met.

• (2) The condition is that—

• (a) the assets consist of or include any investment which is a security or a contractually based investment; or

• (b) the arrangements for their safeguarding and administration are such that the assets may consist of or include investments of the kind mentioned in sub-paragraph (a) and either the assets have at any time since 1st June 1997 done so, or the arrangements have at any time (whether before or after that date) been held out as ones under which such investments would be safeguarded and administered.

• (3) For the purposes of this article—

• (a) it is immaterial that title to the assets safeguarded and administered is held in uncertificated form;

• (b) it is immaterial that the assets safeguarded and administered may be transferred to another person, subject to a commitment by the person safeguarding and administering them, or arranging for their safeguarding and administration, that they will be replaced by equivalent assets at some future date or when so requested by the person to whom they belong.

• (4) For the purposes of this article, the following activities do not constitute the administration of assets—

• (a) providing information as to the number of units or the value of any assets safeguarded;

• (b) converting currency;

• (c) receiving documents relating to an investment solely for the purpose of onward transmission to, from or at the direction of the person to whom the investment belongs.

• (5) This paragraph does not apply to an activity specified by paragraph 7A (safeguarding of qualifying cryptoassets and relevant specified investment cryptoassets).

Advising on investments

7

• (1) Advising a person is a controlled activity if the advice is—

• (a) given to the person in his capacity as an investor or potential investor, or in his capacity as agent for an investor or a potential investor; and

• (b) advice on the merits of his doing any of the following (whether as principal or agent)—

• (i) buying, selling, subscribing for or underwriting a particular investment which is a security , structured deposit , a qualifying cryptoasset or a contractually based investment; or

• (ii) exercising any right conferred by such an investment to buy, sell, subscribe for or underwrite such an investment.

• (2) Advising a person is a controlled activity if the advice is—

• (a) given to the person in that person’s capacity as a lender or potential lender under a relevant paragraph 4C agreement, or in that person’s capacity as an agent for a lender or potential lender under such an agreement; and

• (b) advice on the merits of the person doing any of the following (whether as principal or agent)—

• (i) entering into a relevant paragraph 4C agreement as a lender or assuming the rights of a lender under such an agreement,

• (ii) providing instructions to an operator with a view to entering into a relevant paragraph 4C agreement as a lender or to assuming the rights of a lender under such an agreement by assignment or operation of law, where the instructions involve—

• (aa) accepting particular parameters for the terms of the agreement presented by an operator,

• (bb) choosing between options governing the parameters of the terms of the agreement presented by an operator, or

• (cc) specifying the parameters of the terms of the agreement by other means,

• (iii) enforcing or exercising the lender’s rights under a relevant paragraph 4C agreement, or

• (iv) assigning rights under a relevant paragraph 4C agreement.

• (3) In sub-paragraph (2)—

• “operator” means a person carrying on a controlled activity of the kind specified by paragraph 4C(1) or (2D), and

• “relevant paragraph 4C agreement” means a paragraph 4C agreement (within the meaning of that paragraph) which has been, or is to be, entered into with the facilitation of a person carrying on a controlled activity of the kind specified by paragraph 4C(1) or (2D) not in contravention of the general prohibition.

• (4) For the purposes of the application of section 21(9) and (10) of the Act (restrictions on financial promotion) to an activity of a kind specified by sub-paragraph (2), paragraph 26D of this Schedule (relevant credit agreements), and article 4 (definition of controlled activities and controlled investments) in so far as it relates to that paragraph, have effect as if the reference to a relevant credit agreement in paragraph 26D includes a reference to a paragraph 4C agreement.

Advising on syndicate participation at Lloyd's

8

Advising a person to become, or continue or cease to be, a member of a particular Lloyd's syndicate is a controlled activity.

Providing funeral plan contracts

9

• (1) Entering as provider into a qualifying funeral plan contract is a controlled activity.

• (1A) Carrying out a qualifying funeral plan contract as provider is a controlled activity.

• (2) A “qualifying funeral plan contract” is a contract under which—

• (a) a person (“the customer”) makes one or more payments to another person (“the provider”);

• (b) the provider undertakes to provide, or to secure that another person provides, a funeral in the United Kingdom for the customer (or some other person who is living at the date when the contract is entered into) on his death; and

• (c) the provider is a person who carries on a regulated activity specified in article 59 of the Regulated Activities Order and includes a person who has assumed the undertaking referred to in article 59(2)(b) of that Order as a result of the novation, assignment or transfer by operation of law of an existing qualifying funeral plan contract.

Providing qualifying credit

10

• (1) Providing qualifying credit is a controlled activity.

• (2) “Qualifying credit” is a credit provided pursuant to an agreement under which—

• (a) the lender is a person who carries on the regulated activity specified in article 61 of the Regulated Activities Order; and

• (b) the obligation of the borrower to repay is secured (in whole or in part) on land.

• (3) “Credit” includes a cash loan and any other form of financial accommodation.

Arranging qualifying credit etc.

10A

• (1) Making arrangements—

• (a) for another person to enter as borrower into an agreement for the provision of qualifying credit; or

• (b) for a borrower under a regulated mortgage contract falling within sub-paragraph (2) to vary the terms of that contract in such a way as to vary his obligations under that contract,

is a controlled activity.

• (2) A regulated mortgage contract falls within this sub-paragraph if—

• (a) the contract was entered into on or after 31st October 2004; or

• (b) the contract—

• (i) was entered into before 31st October 2004; and

• (ii) was a regulated credit agreement immediately before 21st March 2016.

• (3) In this paragraph “regulated mortgage contract” has the meaning given by article 61(3) of the Regulated Activities Order.

Advising on qualifying credit etc.

10B

• (1) Advising a person is a controlled activity if the advice is—

• (a) given to the person in his capacity as a borrower or potential borrower; and

• (b) advice on the merits of his doing any of the following—

• (i) entering into an agreement for the provision of qualifying credit, or

• (ii) varying the terms of a regulated mortgage contract falling within sub-paragraph (1A) in such a way as to vary his obligations under that contract.

• (1A) A regulated mortgage contract falls within this sub-paragraph if—

• (a) the contract was entered into on or after 31st October 2004; or

• (b) the contract—

• (i) was entered into before 31st October 2004; and

• (ii) was a regulated credit agreement immediately before 21st March 2016.

• (2) In this paragraph, “borrower” and “regulated mortgage contract” have the meaning given by article 61(3) of the Regulated Activities Order.

Agreeing to carry on specified kinds of activity

11

Agreeing to carry on any controlled activity falling within any of paragraphs 3 to 10BB above (other than paragraph 4A) is a controlled activity.

PART II — Controlled Investments

12

A deposit.

13

Rights under a contract of insurance.

14

• (1) Shares or stock in the share capital of—

• (a) any body corporate (wherever incorporated);

• (b) any unincorporated body constituted under the law of a country or territory outside the United Kingdom.

• (2) Sub-paragraph (1) includes—

• (a) any shares of a class defined as deferred shares for the purposes of section 119 of the Building Societies Act 1986 ;

• (b) any transferable shares in a body incorporated under the law of, or any part of, the United Kingdom relating to co-operative and community benefit societies, industrial and provident societies or credit unions ...

• (3) But subject to sub-paragraph (2) there are excluded from sub-paragraph (1) shares or stock in the share capital of—

• (a) an open-ended investment company;

• (b) a building society incorporated under the law of, or any part of, the United Kingdom;

• (c) any body incorporated under the law of, or any part of, the United Kingdom relating to co-operative and community benefit societies, industrial and provident societies or credit unions;

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

Instruments creating or acknowledging indebtedness

15

• (1) Subject to sub-paragraph (2), such of the following as do not fall within paragraph ... 16—

• (a) debentures;

• (b) debenture stock;

• (c) loan stock;

• (d) bonds;

• (e) certificates of deposit;

• (f) any other instrument creating or acknowledging a present or future indebtedness.

• (2) If and to the extent that they would otherwise fall within sub-paragraph (1), there are excluded from that sub-paragraph—

• (a) any instrument acknowledging or creating indebtedness for, or for money borrowed to defray, the consideration payable under a contract for the supply of goods or services;

• (b) a cheque or other bill of exchange, a banker's draft or a letter of credit (but not a bill of exchange accepted by a banker);

• (c) a banknote, a statement showing a balance on a current, deposit or saving account, a lease or other disposition of property, a heritable security; and

• (d) a contract of insurance.

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) An instrument excluded from sub-paragraph (1) of paragraph 16 by paragraph 16(2)(b) is not thereby to be taken to fall within sub-paragraph (1) of this paragraph.

Government and public securities

16

• (1) Subject to sub-paragraph (2), loan stock, bonds and other instruments—

• (a) creating or acknowledging indebtedness; and

• (b) issued by or on behalf of a government, local authority (whether in the United Kingdom or elsewhere) or international organisation.

• (2) Subject to sub-paragraph (3), there are excluded from sub-paragraph (1)—

• (a) so far as applicable, the instruments mentioned in paragraph 15(2)(a) to (d);

• (b) any instrument creating or acknowledging indebtedness in respect of—

• (i) money received by the Director of Savings as deposits or otherwise in connection with the business of the National Savings Bank;

• (ii) money raised under the National Loans Act 1968 under the auspices of the Director of Savings or treated as so raised by virtue of section 11(3) of the National Debt Act 1972 .

• (3) Sub-paragraph (2)(a) does not exclude an instrument which meets the requirements set out in paragraphs (a) to (e) of paragraph 15A(2).

Instruments giving entitlements to investments

17

• (1) Warrants and other instruments entitling the holder to subscribe for any investment falling within paragraph 14, 15 or 16.

• (2) It is immaterial whether the investment to which the entitlement relates is in existence or identifiable.

• (3) An investment falling within this paragraph shall not be regarded as falling within paragraph 21, 22 or 23.

Certificates representing certain securities

18

• (1) Subject to sub-paragraph (2), certificates or other instruments which confer contractual or property rights (other than rights consisting of an investment of the kind specified by paragraph 21)—

• (a) in respect of any investment of the kind specified by any of paragraphs 14 to 17 being an investment held by a person other than the person on whom the rights are conferred by the certificate or instrument; and

• (b) the transfer of which may be effected without the consent of that person.

• (2) There is excluded from sub-paragraph (1) any instrument which confers rights in respect of two or more investments issued by different persons, or in respect of two or more different investments of the kind specified by paragraph 16 and issued by the same person.

Units in a collective investment scheme

19

Units in a collective investment scheme.

Rights under a stakeholder pension scheme

20

• (1) Rights under a stakeholder pension scheme.

• (2) Rights under a personal pension scheme.

• (3) ”Stakeholder pension scheme” and “personal pension scheme” have the meanings given by article 72(4).

Options

21

• (1) Options to acquire or dispose of—

• (a) a security or contractually based investment (other than one of a kind specified in this paragraph);

• (b) currency of the United Kingdom or of any other country or territory;

• (c) palladium, platinum, gold or silver; ...

• (d) an option to acquire or dispose of an investment falling within this paragraph by virtue of sub-paragraph (a), (b) or (c);

• (e) subject to sub-paragraph (4), an option to acquire or dispose of an option to which paragraph 5, 6, 7 or 10 of Part 1 of Schedule 2 to the Regulated Activities Order (referred to in the following provisions of this paragraph as “Schedule 2”) applies

• (2) Subject to sub-paragraph (4), options—

• (a) to which sub-paragraph (1) does not apply;

• (b) which relate to commodities;

• (c) which may be settled physically; and

• (d) either—

• (i) to which paragraph 5 or 6 of Part 1 of Schedule 2 ... applies, or

• (ii) which in accordance with paragraphs 5, 6 and 8 of Part 2 of Schedule 2 are to be considered as having the characteristics of other derivative financial instruments and not being for commercial purposes, and to which paragraph 7 of Part 1 of that Schedule applies.

• (3) Subject to sub-paragraph (4), options—

• (a) to which sub-paragraph (1) does not apply;

• (b) which may be settled physically; and

• (c) to which paragraph 10 of Part 1 of Schedule 2 ... applies.

• (4) Sub-paragraphs (1)(e), (2) and (3) only apply to options in relation to which—

• (a) an investment firm or qualifying credit institution is providing or performing investment services and activities on a professional basis;

• (b) a management company which has a Part 4A permission to do so is providing the investment service specified in paragraph 4 or 5 of Part 3 of Schedule 2 or the ancillary service specified in paragraph 1 of Part 3A of that Schedule;

• (c) a market operator is providing the investment service specified in paragraph 8 or 9 of Part 3 of that Schedule;

• (d) a full-scope UK AIFM which has a Part 4A permission to do so is providing the investment service specified in paragraph 1, 4 or 5 of Part 3 of that Schedule or the ancillary service specified in paragraph 1 of Part 3A of that Schedule.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Futures

22

• (1) Subject to sub-paragraph (2), rights under a contract for the sale of a commodity or property of any other description under which delivery is to be made at a future date and at a price agreed on when the contract is made.

• (1A) Subject to sub-paragraph (1D), futures—

• (a) to which sub-paragraph (1) does not apply;

• (b) which relate to commodities;

• (c) which may be settled physically; and

• (d) to which paragraph 5 or 6 of Part 1 of Schedule 2 to the Regulated Activities Order (referred to in the following provisions of this paragraph as “Schedule 2”) applies.

• (1B) Subject to sub-paragraph (1D), futures and forwards—

• (a) to which sub-paragraph (1) does not apply;

• (b) which relate to commodities;

• (c) which may be settled physically;

• (d) which in accordance with paragraphs 5, 6 and 8 of Part 2 of Schedule 2 are to be considered as having the characteristics of other derivative financial instruments and not being for commercial purposes; and

• (e) to which paragraph 7 of Part 1 of Schedule 2 applies.

• (1C) Subject to sub-paragraph (1D), futures—

• (a) to which sub-paragraph (1) does not apply;

• (b) which may be settled physically; and

• (c) to which paragraph 10 of Part 1 of Schedule 2 ... applies.

• (1CA) Subject to sub-paragraph (1D), any other derivative contract which relates to currencies and to which paragraph 4 of Part 1 of Schedule 2 applies.

• (1D) Sub-paragraphs (1A), (1B), (1C) and (1CA) only apply to futures, forwards or derivative contacts in relation to which—

• (a) an investment firm or qualifying credit institution is providing or performing investment services and activities on a professional basis;

• (b) a management company which has a Part 4A permission to do so is providing the investment service specified in paragraph 4 or 5 of Part 3 of Schedule 2 or the ancillary service specified in paragraph 1 of Part 3A of that Schedule;

• (c) a market operator is providing the investment service specified in paragraph 8 or 9 of Part 3 of that Schedule;

• (d) a full-scope UK AIFM which has a Part 4A permission to do so is providing the investment service specified in paragraph 1, 4 or 5 of Part 3 of that Schedule or the ancillary service specified in paragraph 1 of Part 3A of that Schedule.

• (1E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) There are excluded from sub-paragraph (1) rights under any contract which is made for commercial and not investment purposes.

• (3) For the purposes of sub-paragraph (2), in considering whether a contract is to be regarded as made for investment purposes or for commercial purposes, the indicators set out in article 84 of the Regulated Activities Order shall be applied in the same way as they are applied for the purposes of that article.

Contracts for differences etc.

23

• (1) Subject to sub-paragraph (2), rights under—

• (a) a contract for differences; or

• (b) any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in—

• (i) the value or price of property of any description;

• (ii) an index or other factor designated for that purpose in the contract.

• (2) There are excluded from sub-paragraph (1)—

• (a) rights under a contract if the parties intend that the profit is to be secured or the loss is to be avoided by one or more of the parties taking delivery of any property to which the contract relates;

• (b) rights under a contract under which money is received by way of deposit on terms that any interest or other return to be paid on the sum deposited will be calculated by reference to fluctuations in an index or other factor;

• (c) rights under any contract under which—

• (i) money is received by the Director of Savings as deposits or otherwise in connection with the business of the National Savings Bank; or

• (ii) money is raised under the National Loans Act 1968 under the auspices of the Director of Savings or treated as so raised by virtue of section 11(3) of the National Debt Act 1972;

• (d) rights under a qualifying contract of insurance.

• (3) Subject to sub-paragraph (4), derivative instruments for the transfer of credit risk—

• (a) to which neither paragraph 21 nor sub-paragraph (1) applies; and

• (b) to which paragraph 8 of Part 1 of Schedule 2 to the Regulated Activities Order (referred to in the following provisions of this paragraph as “Schedule 2”) applies.

• (4) Sub-paragraph (3) only applies to derivatives in relation to which—

• (a) an investment firm or qualifying credit institution is providing or performing investment services and activities on a professional basis;

• (b) a management company which has a Part 4A permission to do so is providing the investment service specified in paragraph 4 or 5 of Part 3 of Schedule 2 or the ancillary service specified in paragraph 1 of Part 3A of that Schedule;

• (c) a market operator is providing the investment service specified in paragraph 8 or 9 of Part 3 of that Schedule;

• (d) a full-scope UK AIFM which has a Part 4A permission to do so is providing the investment service specified in paragraph 1, 4 or 5 of Part 3 of that Schedule or the ancillary service specified in paragraph 1 of Part 3A of that Schedule.

• (4A) Subject to sub-paragraph (4B), a derivative contract of a binary or other fixed outcomes nature—

• (a) to which sub-paragraph (1) does not apply;

• (b) which is settled in cash; and

• (c) which is a financial instrument to which paragraph 4, 5, 6, 7 or 10 of Part 1 of Schedule 2 ... applies.

• (4B) Sub-paragraph (4A) only applies to derivatives in relation to which—

• (a) an investment firm or qualifying credit institution is providing or performing investment services and activities on a professional basis;

• (b) a management company which has a Part 4A permission to do so is providing the investment service specified in paragraph 4 or 5 of Part 3 of Schedule 2 or the ancillary service specified in paragraph 1 of Part 3A of that Schedule;

• (c) a market operator is providing the investment service specified in paragraph 8 or 9 of Part 3 of that Schedule;

• (d) a full-scope UK AIFM which has a Part 4A permission to do so is providing the investment service specified in paragraph 1, 4 or 5 of Part 3 of that Schedule or the ancillary service specified in paragraph 1 of Part 3A of that Schedule.

• (e) a person is carrying on the controlled activity referred to in paragraph 4(2).

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lloyd's syndicate capacity and syndicate membership

24

• (1) The underwriting capacity of a Lloyd's syndicate.

• (2) A person's membership (or prospective membership) of a Lloyd's syndicate.

Funeral plan contracts

25

Rights under a qualifying funeral plan contract.

Agreements for qualifying credit

26

Rights under an agreement for qualifying credit.

Rights to or interests in investments

27

• (1) Subject to sub-paragraphs (2) and (3), any right to or interest in anything which is specified by any other provision of this Part of this Schedule (other than paragraph 26, 26A, 26B or 26C).

• (2) Sub-paragraph (1) does not apply to interests under the trusts of an occupational pension scheme.

• (2A) Sub-paragraph (1) does not apply to any right or interest acquired as a result of entering into a funeral plan contract (and for this purpose a “funeral plan contract” is a contract of a kind described in paragraph 9(2)(a) and (b)).

• (3) Sub-paragraph (1) does not apply to anything which falls within any other provision of this Part of this Schedule.

Interpretation

28

In this Schedule—

• “AIFM” has the meaning given in the Regulated Activities Order;

• “agreement provider” has the meaning given in paragraph (3) of article 63J of the Regulated Activities Order, read with paragraphs (6) and (7) of that article;

• “agreement seller” has the meaning given in article 63J(3) of the Regulated Activities Order

• “borrower” has the meaning given by article 60L of the Regulated Activities Order;

• “buying” includes acquiring for valuable consideration;

• ...

• “consumer hire agreement” has the meaning given by article 60N of the Regulated Activities Order;

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