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PART II |
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REGULATED AND PROHIBITED ACTIVITIES |
| The general prohibition |
The general prohibition. |
17. - (1) No person may carry on a regulated activity in the United Kingdom, or purport to do so, unless he is- |
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(a) an authorised person; or |
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(b) an exempt person in relation to that activity. |
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(2) The prohibition is referred to in this Act as the general prohibition. |
| Requirement for permission |
Authorised persons acting without permission. |
18. - (1) If an authorised person carries on a regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with permission- |
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(a) given to him by the Authority under Part IV, or |
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(b) resulting from any other provision of this Act, |
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he is to be taken to have contravened a requirement imposed on him by the Authority under this Act. |
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(2) But no provision made by or under this Act is to be read as causing such a contravention to affect the rights or obligations of any party to a transaction which constitutes, or is part of, a regulated activity. |
| Financial promotion |
Restrictions on financial promotion. |
19. - (1) A person ("A") must not, in the course of business, communicate an invitation or inducement to engage in investment activity. |
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(2) But subsection (1) does not apply if- |
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(a) A is an authorised person; or |
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(b) the content of the communication is approved for the purposes of this section by an authorised person. |
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(3) 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. |
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(4) The Treasury may by order specify circumstances in which a person is to be regarded for the purposes of subsection (1) as- |
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(a) acting in the course of business; |
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(b) not acting in the course of business. |
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(5) The Treasury may by order specify circumstances (which may include compliance with rules made under section 116) in which subsection (1) does not apply. |
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(6) "Engaging in investment activity" means- |
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(a) entering or offering to enter into an agreement the making or performance of which by either party constitutes a controlled activity; or |
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(b) exercising any rights conferred by an investment to acquire, dispose of, underwrite or convert an investment. |
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(7) An activity is a controlled activity if- |
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(a) it is an activity of a specified kind or one which falls within a specified class of activity; and |
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(b) it relates to an investment of a specified kind, or to one which falls within a specified class of investment. |
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(8) Schedule 2 applies for the purposes of subsection (7), with references to section 20 being read as references to that subsection. |
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(9) Nothing in Schedule 2, as applied by subsection (8), limits the powers conferred by subsection (7). |
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(10) "Communicate" includes causing a communication to be made. |
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(11) "Investment" includes any asset, right or interest. |
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(12) "Specified" means specified in an order made by the Treasury. |
| Regulated activities |
The classes of activity and categories of investment. |
20. - (1) An activity is a regulated activity for the purposes of this Act if it is an activity of a specified kind which- |
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(a) relates to an investment of a specified kind; or |
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(b) in the case of an activity of a kind which is also specified for the purposes of this paragraph, is carried on in relation to property of any kind. |
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(2) Schedule 2 makes provision supplementing this section. |
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(3) Nothing in Schedule 2 limits the powers conferred by subsection (1). |
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(4) "Investment" includes any asset, right or interest. |
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(5) "Specified" means specified in an order made by the Treasury. |
| Offences |
Contravention of the general prohibition. |
21. - (1) A person who contravenes the general prohibition is guilty of an offence and liable- |
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(a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both; |
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(b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both. |
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(2) In this Act "an authorisation offence" means an offence under this section. |
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(3) 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. |