Financial Services and Markets Bill - continued        House of Lords
PART II, REGULATED AND PROHIBITED ACTIVITIES - continued

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Regulated activities
The classes of activity and categories of investment.     20. - (1) An activity is a regulated activity for the purposes of this Act if it is an activity of a specified kind which is carried on by way of business and-
 
 
    (a) relates to an investment of a specified kind; or
 
    (b) in the case of an activity of a kind which is also specified for the purposes of this paragraph, is carried on in relation to property of any kind.
      (2) Schedule 2 makes provision supplementing this section.
 
      (3) Nothing in Schedule 2 limits the powers conferred by subsection (1).
 
      (4) "Investment" includes any asset, right or interest.
 
      (5) "Specified" means specified in an order made by the Treasury.
 
 
Offences
Contravention of the general prohibition.     21. - (1) A person who contravenes the general prohibition is guilty of an offence and liable-
 
 
    (a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;
 
    (b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.
      (2) In this Act "an authorisation offence" means an offence under this section.
 
      (3) In proceedings for an authorisation offence it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.
 
False claims to be authorised or exempt.     22. - (1) A person who is neither an authorised person nor, in relation to the regulated activity in question, an exempt person is guilty of an offence if he-
 
 
    (a) describes himself (in whatever terms) as an authorised person;
 
    (b) describes himself (in whatever terms) as an exempt person in relation to the regulated activity; or
 
    (c) behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is-
 
      (i) an authorised person; or
 
      (ii) an exempt person in relation to the regulated activity.
      (2) In proceedings for an offence under this section it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.
 
      (3) A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding level 5 on the standard scale, or both.
 
      (4) But where the conduct constituting the offence involved or included the public display of any material, the maximum fine for the offence is level 5 on the standard scale multiplied by the number of days for which the display continued.
 
Contravention of section 19.     23. - (1) A person who contravenes section 19(1) is guilty of an offence and liable-
 
 
    (a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;
 
    (b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.
      (2) In proceedings for an offence under this section it is a defence for the accused to show-
 
 
    (a) that he believed on reasonable grounds that the content of the communication was prepared, or approved for the purposes of section 19, by an authorised person; or
 
    (b) that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.
 
Enforceability of agreements
Agreements made by unauthorised persons.     24. - (1) An agreement made by a person in the course of carrying on a regulated activity in contravention of the general prohibition is unenforceable against the other party ("the purchaser").
 
      (2) The purchaser is entitled to recover-
 
 
    (a) any money or other property paid or transferred by him under the agreement; and
 
    (b) compensation for any loss sustained by him as a result of having parted with it.
      (3) "Agreement" means an agreement-
 
 
    (a) made after this section comes into force; and
 
    (b) the making or performance of which constitutes, or is part of, the regulated activity in question.
      (4) This section does not apply if the regulated activity is deposit-taking.
 
 
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