FSA Regulation

FSA Regulation

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My client, together with 9 friends, has set a company to invest in property etc. which has been very sucessful.

She now wishes to repeat the exercise but is this time attempting to attract investors from 'acquaintances' at various business groups etc. She hasn't placed any written adverts and everything has been done by word of mouth, although she has compiled a document showing how the company will be set up and operated.

Could this second company come under any FSA or other regulations??
Louise

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By AnonymousUser
27th Jul 2005 12:51

Be careful
Investment in property is not a regulated activity, so the company itslf does not need FSA authorisation. However, it sounds as if your client is promoting the sale of shares. This can only be done by an authorised firm or if a promotion is approved by an authorised firm unless there are relevant exemptions. Possible exemptions are the 'one -off exemption, the 'experienced investor' exemption and the 'high net worth individual' exemption.

As there are potential criminal penalties(especially if the venture reults in the investors losing money) you client will need specialised advice.

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