What is the financial promotion regime?

The term ‘financial promotion’ is not used in the Financial Services and Markets Act 2000 (fsma 2000) other than in the title of section 21. Under FSMA 2000, s 21(1), a person (A) must not, in the course of business, communicate an invitation or inducement (communicate includes causing a communication to be made) to engage in investment activity, subject to the circumstance set out in Circumstances in which the financial promotion restriction does not apply below.

Engaging in investment activity means the entering or offering to enter into an agreement the making or performance of which by either party constitutes a controlled activity; or the exercising of any rights conferred by a controlled investment to acquire a controlled investment.

In addition, as a result of an amendment made by Financial Guidance and Claims Act 2018, the financial promotion restriction has been extended to ‘engaging in claims management activities’. The Financial Guidance and Claims Act 2018 (Commencement No. 4) Regulations 2018, SI 2018/1045 brought the amendment into force on 6 October 2018.

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