7.3.2 Regulated activities

Section 19 of FSMA sets out a general prohibition on any person carrying on, or purporting to carry on, a regulated activity. Section 22 of FSMA defines what types of financial services are regulated activities by reference to the FSMA (Regulated Activities) Order 2001. Article 76 of this Order states that transferable shares in a society are a specified investment and the offer of this type of share capital falls within the scope of regulated activities. But other forms of shares in societies, such as non-transferable withdrawable shares are not included.

Article 18 of the Order also excludes from regulation a company making arrangements to issue its own shares, or any person issuing debentures. Even though these are not regulated activities, the offer of such shares or debentures may still be subject to financial promotion regulations. Section 755 of the Companies Act 2006 prohibits the public offer of securities in a private company.


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