AUTH App 1.24 Advising on investments

Under article 53 of the Regulated Activities Order, advising on investments covers advice which:

1. (1)

   is given to a person in his capacity as an investor or potential investor, or in his capacity as agent for an investor or a potential investor; and

2. (2)

   is advice on the merits of his (whether as principal or agent) buying, selling, subscribing for or underwriting a particular investment which is a security or a relevant investment or exercising any right conferred by such an investment to buy, sell, subscribe for or underwrite such an investment. 1

The effect of advice being given in the circumstances referred to in AUTH App 1.24.1 G is that:

1. (1)

   it must relate to an investment which is a security or a relevant investment;1

2. (2)

   that investment must be a particular investment;

3. (3)

   it must be given to persons in their capacity as investors or potential investors;

4. (4)

   it must be advice (that is, not just information); and

5. (5)

   it must relate to the merits of investors or potential investors (or their agents) buying, selling, subscribing for or underwriting (or exercising rights to acquire, dispose of or underwrite) the investment.

Each of the aspects referred to in AUTH App 1.24.2 G is considered in greater detail in AUTH App 1.25 to AUTH App 1.29. In addition, under article 52A of the Regulated Activities Order providing advice on a stakeholder product is a regulated activity and under article 256 of the Regulated Activities Order, advising a person to become, or continue or cease to be a member of a particular Lloyd's syndicate is a regulated activity.