Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Shares definition

What does Shares mean? In company law practice, a share is a unit of a member’s interest in a company, carrying the rights and obligations attached to its class (for example, voting, dividends and return of capital on a winding up). The Companies Act 2006 simply states that a share is a share in a company’s share capital; the Irish Companies Act 2014 adopts a broadly equivalent approach. Usage and effect are consistent across England & Wales, Scotland, Northern Ireland and Ireland. A company’s share capital comprises the number of shares it allots and issues to investors on or after incorporation. Those...

Share-based incentives for non-executive directors under FSMA 2000: General Prohibition, Financial Promotion Restriction and key exemptions

Published by a LexisNexis Share Incentives expert

Practice notes

It is routine for employees, particularly executive directors, to receive awards over shares. A series of exemptions permits these grants to be made without infringing the Financial Services and Markets Act 2000 (fsma 2000). By contrast, providing share awards to people who are not employees, such as non-executive directors, is more complex because several of those carve-outs do not apply...

This Practice Note highlights the FSMA 2000 considerations when granting share awards or options to non-employees and maps out potential ways through each. As the most suitable route turns on the facts of the case, it is for the practitioner to determine whether, in their situation, the proposal might fall outside the scope of the relevant prohibition. For guidance on other, non-FSMA 2000 matters arising when granting such awards to non-executive directors, see Practice Note: Shares for non-executive directors—issues and considerations...

FSMA 2000 contains two key provisions which are relevant for incentive plans. These are:

(1) the prohibition on any person carrying out a regulated activity other than an authorised or exempt person (the ‘General Prohibition’)...
(2) the restriction on communicating an invitation or inducement, in...

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Alex Paterson

Squire Patton Boggs

Alex is currently an associate in the Tax, Strategy and Benefits department at Squire Patton Boggs with experience advising corporate clients on the various tax-related issues arising on corporate transactions, including the implications of corporation tax, SDLT, stamp duty and VAT on M&A and PE deals. Alex also has expertise on the implementation and maintenance of various employee benefit schemes, in particular EMI schemes, and advising on the tax implications on the grant and exercise of employee related securities on private equity investments, company sales or otherwise....

Paul Anderson

Squire Patton Boggs

Paul Anderson has specialised in financial services matters for over fifteen years. His particular expertise covers a range of retail and wholesale financial services businesses including clients from the banking, investment management, insurance, building society, broker dealer and IFA sectors as well as intermediaries in the energy, investment and insurance sectors.Paul was previously International Counsel at Prudential Bache, the UK investment business of Prudential Financial, Inc., where he supported the investment management, stock broking and commodity trading parts of the business in the UK and European branches in the Netherlands and Belgium....

Web page updated on 21/05/2026

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