Section 21 of the Financial Services and Markets Act 2000 (FSMA) provides that a person must not in the course of business, communicate an invitation or inducement to engage in investment activity unless the promotion has been made or approved by an authorised person or it is exempt. This is known as the financial promotion restriction. This note explains the UK financial promotion regime under FSMA. It explains what a financial promotion is, how it applies to unauthorised and authorised persons, and outlines available exemptions under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (FPO). The note also explains the territorial scope of the regime, penalties for breaching the financial promotion restriction, and the FCA's approach to supervising financial promotions.
This note considers the rules under the Companies Act 2006, that have applied since 1 October 2009, that prohibit a public company from giving financial assistance for the purpose of the acquisition of its shares or those of a parent company, and a private company from giving financial assistance for the purpose of the acquisition of shares of a public parent company. For details of the pre-1 October 2009 position under the Companies Act 1985, see Practice note, Financial assistance: pre-1 October 2009.