On 17th May 2002 the FSA published the final form of its guidance
on Financial Promotion under the Financial Services and Markets Act
2000. The Guidance, which is contained in the Financial Promotion
Guidance Instrument 2002, is the revised version of the draft
guidance issued by the FSA in August 2001. It provides
clarification of a number of issues which were raised by
commentators in relation to the draft guidance. It is hoped that
its publication will help companies and their advisers to navigate
their way through the complexities of the financial promotion
regime.
Key elements covered by The Guidance
- It indicates how the FSA will interpret the regime in practice;
although it will not be binding on the courts (which might be used,
for example, by a party claiming that an agreement should not be
enforceable because it was made as a result of an unlawful
financial promotion), it seems likely that a court would attach
considerable weight to a party's (non-)compliance with the Guidance
in making a decision in such circumstances
- It includes a discussion of the meaning of 'invitation' and
'inducement' (which are not defined in the legislation)
- It puts forward an objective test for determining whether a
communication has a promotional element
- It provides specific guidance on a number of particular
communications including:
- web links
- publications or broadcasts of prices of investments
- company statements and announcements
- analysts briefings
- performance tables
- share purchase agreements
- invitations to attend meetings or to receive telephone calls or
visits
- solicited and accompanying material
- telephone services
- communications by employers to their employees
More detailed guidance is also given on some of the exemptions
available under The Financial Services and Markets Act 2000
(Financial Promotion) Order 2001, including the exemptions for
promotions broadcast by a company director, one-off communications
and the sale of a body corporate.
The Guidance is available from the FSA's website at
the following address:
http://www.fsa.gov.uk/handbook/legal_instruments/2002/may16_fin_promo.pdf
For further information, please contact:
Nick Callister Radcliffe
Corporate Partner
Phone: +44 (0)20 7367 2394
Email: nick.callisterradcliffe@cms-cmck.com
or
Simon Howley
Phone: +44 (0)20 7367 3566
Email: simon.howley@cms-cmck.com