F1PART 9ARules and Guidance

CHAPTER 1Rule-making powers

Specific rule-making powers

137RFinancial promotion rules

(1)

The FCA may make rules applying to authorised persons about the communication by them, or their approval of the communication by others, of invitations or inducements—

(a)

to engage in investment activity, or

(b)

to participate in a collective investment scheme.

(2)

Rules under this section may, in particular, make provision about the form and content of communications.

(3)

Subsection (1) applies only to communications which—

(a)

if made by a person other than an authorised person, without the approval of an authorised person, would contravene section 21(1), and

(b)

may be made by an authorised person without contravening section 238(1).

(4)

But subsection (3) does not prevent the FCA from making rules under subsection (1) in relation to a communication that would not contravene section 21(1) if made by a person other than an authorised person, without the approval of an authorised person, if the conditions set out in subsection (5) are satisfied.

(5)

Those conditions are—

(a)

that the communication would not contravene subsection (1) of section 21 because it is a communication to which that subsection does not apply as a result of an order under subsection (5) of that section,

(b)

that the FCA considers that any of the requirements of—

(i)

F2Articles 24 (general principles and information to clients) and 25 (assessment of suitability and appropriateness and reporting to clients) of the markets in financial instruments directive,

F3(ii)

any delegated act adopted under Article 24.13 or 25.8 of that directive,

(iii)

Article 77 of the UCITS directive, F4or

(iv)

Articles 10 and 11 of the mortgages directive,

apply to the communication, and

(c)

that the FCA considers that the rules are necessary to secure that the communication satisfies such of the requirements mentioned in paragraph (b) as the FCA considers apply to the communication.

(6)

“Engage in investment activity” has the same meaning as in section 21.

(7)

The Treasury may by order impose limitations on the power to make rules under this section.