Contractually based investments meaning

This Practice Note addresses the regulated activity of managing investments... Definition Managing investments is a regulated activity under article 37 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO). It entails exercising discretion over assets that beneficially belong to another person, where those assets consist of, or include, any investment categorised as a ‘security’, a ‘structured deposit’ or a ‘contractually-based investment’. For further detail on what constitutes a ‘security’, a ‘structured deposit’ or a ‘contractually-based investment’, see Securities, structured deposits or contractually-based investments below)... The exercise of discretion This regulated activity only arises where the investment manager exercises discretion. Where portfolio management is non-discretionary—for example, the manager purchases shares strictly on client instructions, or simply receives and forwards client orders—the work is more likely to fall within another regulated activity, such as ‘dealing in investments, either as principal or agent’ (RAO SI 2001/544, arts 14 and 21) or ‘arranging deals in investments’ (RAO SI 2001/544, art 25)...

Definition 'Custody' (as it is commonly termed) is a regulated activity under article 40 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO). It comprises both of the following: the safeguarding of assets that belong to another person, and the administration of those assets. Arranging custody (for one or more other persons to carry on that activity) is itself a separate regulated activity under SI 2001/544, art 40. The activity applies to assets that are designated investments (ie securities or contractually-based investments). Administering an investment may, for example, include crediting income generated by an investment to the beneficiary's account; however, discretion must not be exercised when undertaking these functions, otherwise the conduct falls within another regulated activity (advising on investments, or managing investments), for which separate permission will be required. Safeguarding an investment means keeping it in safe custody, for instance holding a share certificate securely. The Client Assets Sourcebook The Client Assets Sourcebook...

Scope of this Practice Note This Practice Note sets out information on the regulated activity of dealing in investments (whether as principal or as agent) as contained in article 14 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO), as amended from time to time. Authorised persons may obtain permission to deal in investments either on their own account or on behalf of another; both routes are specified activities. Dealing as principal is a regulated activity under RAO, SI 2001/544, art 14. When acting as principal (i.e. for oneself), the activity covers the following in respect of securities or contractually-based investments, excluding funeral plan contracts (see article 87 of the RAO) and rights to or interests in investments (see article 89 of the RAO): buying selling subscribing for underwriting The running of a multilateral trading facility or an organised trading facility is not within the scope of RAO, SI 2001/544, art 14...