11 June 2002

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FSA guidance on Financial Promotion

On 17th May 2002 the FSA published the final form
of its guidance on Financial Promotion under the
Financial Services and Markets Act 2000. The
Guidance, which is contained in the Financial
Promotion Guidance Instrument 2002, is the revised
version of the draft guidance issued by the FSA in
August 2001. It provides clarification of a number of
issues which were raised by commentators in relation
to the draft guidance. It is hoped that its publication
will help companies and their advisers to navigate
their way through the complexities of the financial
promotion regime.

Key elements covered by The Guidance:

*It indicates how the FSA will interpret the regime in
practice; although it will not be binding on the courts
(which might be used, for example, by a party
claiming that an agreement should not be enforceable
because it was made as a result of an unlawful
financial promotion), it seems likely that a court
would attach considerable weight to a party's (non-)
compliance with the Guidance in making a decision
in such circumstances

*It includes a discussion of the meaning of 'invitation'
and 'inducement' (which are not defined in the
legislation)

*It puts forward an objective test for determining
whether a communication has a promotional element

*It provides specific guidance on a number of
particular communications including:

- web links
- publications or broadcasts of prices of investments
- company statements and announcements
- analysts briefings
- performance tables
- share purchase agreements
- invitations to attend meetings or to receive
telephone calls or visits
- solicited and accompanying material
- telephone services
- communications by employers to their employees

More detailed guidance is also given on some of the
exemptions available under The Financial Services
and Markets Act 2000 (Financial Promotion) Order
2001, including the exemptions for promotions
broadcast by a company director, one-off
communications and the sale of a body corporate.
The Guidance is available from the FSA's website at
the following address:

For further information, please contact Nick Callister
Radcliffe (Corporate) at
nick.callisterradcliffe@cmck.com or on
+44 (0)20 7367 2394 or Simon Howley (Corporate) at
simon.howley@cmck.com or on +44 (0)20 7367 3566

CMS Cameron McKenna