In June 2013 the Financial Conduct Authority (FCA) published a policy statement and final rules to ban the promotion of units in unregulated collective investment schemes (UCIS) and other non-mainstream pooled investments (NMPIs) to the vast majority of retail investors in the UK from 1st January 2014.
A financial promotion is a communication that is an invitation or an inducement to engage in investment activity.
In other words, there is an element of persuasion. An inducement is intended to lead, ultimately, to an agreement to engage in investment activity. So an advertisement by a firm claiming customers will make a fortune by investing in securities, and that the firm can help them invest, is an inducement to engage in investment activity.
Thank you to Paul Sutton of LCN Legal for contributing this article. Paul's details can be found at the end of this article.
The Alternative Investment Fund Managers Directive applies to alternative investment funds (AIFs) that are managed or marketed in the European Union.
So what is an AIF?
In March 2014 the FCA issued it's Policy Statement, entitled 'The FCA's regulatory approach to crowdfunding over the internet, and the promotion of non-readily realisable securities by other media'.