The Financial Services Act 1986 (Restriction of Right of Action) Regulations 1991

• Citation: S.I. 1991/489
• Sections: 3

Section 1 Citation, commencement and interpretation

(1) These Regulations may be cited as the Financial Services Act 1986 (Restriction of Right of Action) Regulations 1991 and shall come into force on Ist April 1991.

(2) In these Regulations—

(a) “ the Act ” means the Financial Services Act 1986; and

(b) “investment business” includes—

(i) anything done by a person holding a permission granted under paragraph 23 of Schedule I to the Act being a thing to which paragraph 12 of that Schedule does not apply by virtue of paragraph 23(1); and

(ii) the activity of management mentioned in section 191 of the Act when engaged in by a person who is treated as carrying on investment business by virtue of that section.

Section 2 Definition of private investor

(1) For the purposes of section 62A(1) of the Act, the expression “private investor” means an investor whose cause of action arises as a result of anything he has done or suffered—

(a) in the case of an individual, otherwise than in the course of carrying on investment business; and

(b) in the case of any other person, otherwise than in the course of carrying on business of any kind,

but does not include a government, local authority or public authority.

(2) In paragraph (1) above, the expression “government, local authority or public authority” has the meaning given in Note (1) to paragraph 3 of Schedule 1 to the Act.

Section 3 Circumstances in which action may he brought at suit of person other than private investor

The following circumstances are specified for the purposes of section 62A(1) as being circumstances in which action may be brought at the suit of a person other than a private investor—

(a) circumstances in which the contravention in question is not a contravention of a kind mentioned in section 62(1) or (2) of the Act;

(b) circumstances in which the contravention in question is a contravention of any rule, regulation, condition or requirement prohibiting a person from seeking to make provision excluding or restricting any duty or liability;

(c) circumstances in which the contravention in question is a contravention of any rule, regulation, condition or requirement directed at ensuring that transactions in an investment are not effected with the benefit of unpublished information which, if made public, would be likely to affect the price of the investment; and

(d) circumstances in which the action would be brought at the suit of a person in a fiduciary or representative capacity (“the representative”) and the following conditions are fulfilled—

(i) the cause of action arises as a result of anything done or suffered at a time when the person to whom the representative owed a duty or for whom he was acting was a person of a kind mentioned in sub-paragraph (a) or (b) of regulation (2)(1) above; and

(ii) any recovery would be exclusively for the benefit of such a person and could not be effected through action brought otherwise than at the suit of the representative.