Suggested e-commerce relevant amendments
to Exemptions and Regulated Activities Orders
"Mere Conduits"—Section 23 Exemptions
Order
The "principal purpose" limitation discriminates
against multi-purpose companies as well as being inconsistent
with parallel provisions in the E-commerce Directive;
The limitation to content "devised by a
customer" would render the "mere conduit" concession
ineffective for the majority of internet delivered content that
will originate from third parties who are not the service supplier's
customers but instead are either customers of other service suppliers
or are other third party sources;
The language of sub-paragraph (c) should be
amended to clarify that automated technical processes involved
in the processing of information do not, for the purposes of the
sub-paragraph, constitute "select, modify or otherwise exercise
control . . .";
There should be an unqualified exemption for
the providers of mere telecommunications where the limitations
noted above are particularly inappropriate;
There should be an express provision to exclude
hypertext links, but subject to "notice and take down".
Media Neutrality—S15 Exemption and Ss 78
& 79 Regulated Activities Orders
The position of online communications should
be clarified with the aim of achieving the wider government objective
of neutrality in media regulation.
The term "equivalent publication conveyed
by means of a telecommunications system" contained in the
Exemption Order is uncertain and discriminates against online
media.
Sections 78 and 79 of the Regulated Activities
Order, which provide exemptions from investment advice regulation
to certain categories of media, have not been modernised to provide
for the positions of online suppliers, other than suppliers of
teletext services. The Investment Business (Jersey) Law 1998 provides
a good drafting template for modernising media exemptions (Article
3, Second Schedule).
The Publishers Defence
A provision equivalent to section 57(4) of the
Financial Services Act should be restored.
Republications
Under the existing regime, it is lawful for
any unauthorised person to pass on an investment communication
which at some point previously had been issued or approved by
an authorised person. The new draft regime leaves unclear the
position of further communication by an unauthorised person. In
order to avoid unnecessary uncertainty for online service suppliers,
HMT should clarify that once a communication has been approved,
any further communication of the approved contents is not caught
by the Section 19 prohibition.
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