Financial Services Act 1986 (Repealed)

57 Restrictions on advertising. U.K.

(1) Subject to section 58 below, no person other than an authorised person shall issue or cause to be issued an investment advertisement in the United Kingdom unless its contents have been approved by an authorised person.

(2) In this Act “an investment advertisement” means any advertisement inviting persons to enter or offer to enter into an investment agreement or to exercise any rights conferred by an investment to acquire, dispose of, underwrite or convert an investment or containing information calculated to lead directly or indirectly to persons doing so.

(3) Subject to subsection (4) below, any person who contravenes this section shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.

(4) A person who in the ordinary course of a business other than investment business issues an advertisement to the order of another person shall not be guilty of an offence under this section if he proves that he believed on reasonable grounds that the person to whose order the advertisement was issued was an authorised person, that the contents of the advertisement were approved by an authorised person or that the advertisement was permitted by or under section 58 below.

(5) If in contravention of this section a person issues or causes to be issued an advertisement inviting persons to enter or offer to enter into an investment agreement or containing information calculated to lead directly or indirectly to persons doing so, then, subject to subsection (8) below—

(a) he shall not be entitled to enforce any agreement to which the advertisement related and which was entered into after the issue of the advertisement; and

(b) the other party shall be entitled to recover any money or other property paid or transferred by him under the agreement, together with compensation for any loss sustained by him as a result of having parted with it.

(6) If in contravention of this section a person issues or causes to be issued an advertisement inviting persons to exercise any rights conferred by an investment or containing information calculated to lead directly or indirectly to persons doing so, then, subject to subsection (8) below—

(a) he shall not be entitled to enforce any obligation to which a person is subject as a result of any exercise by him after the issue of the advertisement of any rights to which the advertisement related; and

(b) that person shall be entitled to recover any money or other property paid or transferred by him under any such obligation, together with compensation for any loss sustained by him as a result of having parted with it.

(7) The compensation recoverable under subsection (5) or (6) above shall be such as the parties may agree or as a court may, on the application of either party, determine.

(8) A court may allow any such agreement or obligation as is mentioned in subsection (5) or (6) above to be enforced or money or property paid or transferred under it to be retained if it is satisfied—

(a) that the person against whom enforcement is sought or who is seeking to recover the money or property was not influenced, or not influenced to any material extent, by the advertisement in making his decision to enter into the agreement or as to the exercise of the rights in question; or

(b) that the advertisement was not misleading as to the nature of the investment, the terms of the agreement or, as the case may be, the consequences of exercising the rights in question and fairly stated any risks involved in those matters.

(9) Where a person elects not to perform an agreement or an obligation which by virtue of subsection (5) or (6) above is unenforceable against him or by virtue of either of those subsections recovers money paid or other property transferred by him under an agreement or obligation he shall repay any money and return any other property received by him under the agreement or, as the case may be, as a result of exercising the rights in question.

(10) Where any property transferred under an agreement or obligation to which subsection (5) or (6) above applies has passed to a third party the references to that property in this section shall be construed as references to its value at the time of its transfer under the agreement or obligation.

Modifications etc. (not altering text)

C1 S. 57: excluded by S.I. 1988/716, arts. 3(1), 4(2), 5(2), 6, 7(2), 8, 9

C2 S. 57: excluded by S.I. 1988/316, arts. 3(1)(2), 4(1), 5, 6(2), 7(2), 10(1), 11, 12

C3 S. 57: excluded by S.I. 1990/27, art. 2

C4 S. 57: excluded (S.) by Enterprise and New Towns (Scotland) Act 1990 (c. 35, SIF 64), s. 31(2)

C5 S. 57 amended (1.1.1993) by S.I. 1992/3218, reg. 55, Sch. 9 para.17.

s. 57 excluded (19.6.1995) by S.I. 1995/1266, arts. 3(1)(2), 4(1), 5(1)(2), 6(1), 7, 8(2), 9(2), 10(2), 11(2), 12(1), 13, 14, 15, 16(1), 17, 18

s. 57 extended (1.1.1996) by S.I. 1995/3275, reg. 32, Sch. 7 para. 17

s. 57 restricted (15.7.1996) by S.I. 1996/1586, regs. 3-18

s. 57 excluded (19.6.1995) by S.I. 1995/1536, arts. 3(1), 4(2), 5(2), 6, 7(2), 8(1), 11-15