Liabilities for Share Issues

Question 1

s.21(1) FSMA

Answer 1

prohibition on promotion and marketing of an ‘investment activity’ = invitation or inducement to engage in investment activity

Question 2

Communication that:

• relates to a specific offer of securities to the public or admission to trading on a regulated market
• aims to specifically promote the potential subscription or acquisition of securities

What is this?

Answer 2

Advertisement

EVERYTHING is an advertisement unless it is an FCA approved prospectus

Question 3

What is verification?

Answer 3

• Solicitors prepare a doc asking questions about every statement in the prospectus
• checks accuracy and flushes out any omissions to avoid liability
• put to Ds to answer, providing evidence

Question 4

Who is responsible for the prospectus?

Answer 4

• issuer (company listing)
• present and future directors
• persons named in declaration of responsibility on prospectus

Question 5

What is a supplementary prospectus?

Answer 5

Used when a new factor/mistake/inaccuracy in prospectus comes to light - must submit a supplementary prospectus which needs to be approved by the FCA