The prohibition is referred to in this Act as the general prohibition.

In prescribed cases F6a contravention within subsection (1) or (1A) is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.

Subsections (1) and (1A) are subject to section 39(1D).

References in this Act to an authorised person acting in contravention of this section are references to the person acting in a way that results in a contravention within subsection (1) or (1A).

A person (“A”) must not, in the course of business, communicate an invitation or inducement to engage in investment activity.

In the case of a communication originating outside the United Kingdom, subsection (1) applies only if the communication is capable of having an effect in the United Kingdom.

The Treasury may by order specify circumstances (which may include compliance with financial promotion rules) in which subsection (1) does not apply.

The Treasury may by order repeal subsection (3).

An investment is a controlled investment if it is an investment of a specified kind or one which falls within a specified class of investment.

Schedule 2 (except paragraph 26) applies for the purposes of subsections (9) and (10) with references to section 22 being read as references to each of those subsections.

Nothing in Schedule 2, as applied by subsection (11), limits the powers conferred by subsection (9) or (10).

“Communicate” includes causing a communication to be made.

“Investment” includes any asset, right or interest.

“Specified” means specified in an order made by the Treasury.

Schedule 2 makes provision supplementing this section.

Nothing in Schedule 2 limits the powers conferred by subsection (1) F10or (1A).

“Investment” includes any asset, right or interest.

“Specified” means specified in an order made by the Treasury.

The Treasury may by order specify the regulated activities that are “PRA-regulated activities” for the purposes of this Act.

Provision made as a result of subsection (2)(e) may amend any primary or subordinate legislation, including any provision of, or made under, this Act.

“Relevant provision” means this section or any provision made under this section.

This section applies to the first order made under section 22A(1).

Subsection (5) applies if an order to which this section applies contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.

The “relevant period” is a period of 28 days beginning with the day on which the order is made.

In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.

In this Act “credit-related regulated activity” means a regulated activity of a kind designated by the Treasury by order.

But a regulated activity may not be designated under subsection (1B) if the agreement in question is one under which the obligation of the borrower is secured on land.

“Credit” includes any cash loan or other financial accommodation.

In this Act “an authorisation offence” means an offence under this section.

In proceedings for an authorisation offence it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

Subsection (1A) is subject to section 39(1D).

No proceedings may be brought against a person in respect of an offence under subsection (1A) in a case where either regulator has taken action under section 205, 206 or 206A in relation to the alleged contravention within section 20(1) or (1A).

This section applies to the first order made under section 23(1B).

This section also applies to any subsequent order made under section 23(1B) which contains a statement by the Treasury that, in their opinion, the effect (or one of the effects) of the proposed order would be that an activity would become a credit-related regulated activity.

An order to which this section applies may not be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

In proceedings for an offence under this section it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding level 5 on the standard scale, or both.

F17But where the conduct constituting the offence involved or included the public display of any material, the maximum fine for the offence is level 5 on the standard scale multiplied by the number of days for which the display continued.

An agreement made by a person in the course of carrying on a regulated activity in contravention of the general prohibition is unenforceable against the other party.

This section does not apply if the regulated activity is accepting deposits.

An agreement that is made by an authorised person in contravention of section 20 is unenforceable against the other party if the agreement is entered into in the course of carrying on a credit-related regulated activity involving matters falling within section 23(1C)(a).

If the administration of an agreement involves the carrying on of a credit-related regulated activity, the agreement may not be enforced by a person for the time being exercising the rights of the lender under the agreement unless that person has permission, given under Part 4A or resulting from any other provision of this Act, in relation to that activity.

The agreement is unenforceable against the other party.

This section does not apply if the regulated activity is accepting deposits.

This section applies to an agreement which is unenforceable because of section 26 or 27F21, other than an agreement entered into in the course of carrying on a credit-related regulated activity.

The issue is whether the person carrying on the regulated activity concerned reasonably believed that he was not contravening the general prohibition by making the agreement.

The issue is whether the provider knew that the third party was (in carrying on the regulated activity) contravening the general prohibition.

If property transferred under the agreement has passed to a third party, a reference in section 26 or 27 or this section to that property is to be read as a reference to its value at the time of its transfer under the agreement.

The commission of an authorisation offence does not make the agreement concerned illegal or invalid to any greater extent than is provided by section 26 or 27.

The issue is whether the relevant firm reasonably believed that by making the agreement the relevant firm was neither contravening the general prohibition nor contravening section 20.

The issue is whether the provider knew that the third party was (in carrying on the credit-related regulated activity) either contravening the general prohibition or contravening section 20.

An application to the FCA under this section by the relevant firm may relate to specified agreements or to agreements of a specified description or made at a specified time.

The FCA must, so far as it is reasonably practicable to do so, give a copy of the notice to any other person who appears to it to be affected by the determination to which the notice relates.

A person who is aggrieved by the determination of an application under section 28A(2)(b) or (3) may refer the matter to the Tribunal.

This section applies to an agreement between a person (“the depositor”) and another person (“the deposit-taker”) made in the course of the carrying on by the deposit-taker of accepting deposits in contravention of the general prohibition.

If the depositor is not entitled under the agreement to recover without delay any money deposited by him, he may apply to the court for an order directing the deposit-taker to return the money to him.

The court need not make such an order if it is satisfied that it would not be just and equitable for the money deposited to be returned, having regard to the issue mentioned in subsection (4).

The issue is whether the deposit-taker reasonably believed that he was not contravening the general prohibition by making the agreement.

In considering whether to allow the agreement or obligation to be enforced or (as the case may be) the money or property paid or transferred under the agreement to be retained the court must have regard to the issues mentioned in subsections (6) and (7).

If the applicant made the unlawful communication, the issue is whether he reasonably believed that he was not making such a communication.

If the applicant did not make the unlawful communication, the issue is whether he knew that the agreement was entered into in consequence of such a communication.

“Applicant” means the person seeking to enforce the agreement or obligation or retain the money or property paid or transferred.

Any reference to making a communication includes causing a communication to be made.

If a person elects not to perform an agreement or an obligation which (by virtue of subsection (2) or (3)) is unenforceable against him, he must repay any money and return any other property received by him under the agreement.

If (by virtue of subsection (2) or (3)) a person recovers money paid or property transferred by him under an agreement or obligation, he must repay any money and return any other property received by him as a result of exercising the rights in question.

If any property required to be returned under this section has passed to a third party, references to that property are to be read as references to its value at the time of its receipt by the person required to return it.