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PREVENTION OF FRAUD (INVESTMENTS) ACT (NORTHERN IRELAND) 1940 - SECT 13

Restriction on distribution of circulars relating to investments.

13.(1) Subject to the provisions of this section, no person shall, on or after
the appointed day

(a)distribute or cause to be distributed any documents which, to his
knowledge, are circulars containing

(i)any invitation to persons to do any of the acts mentioned in paragraphs (a)
to (c) of sub-section (1) of the last preceding section, or

(ii)any information calculated to lead directly or indirectly to the doing of
any of those acts by the recipient of the information, or

(b)have in his possession for the purpose of distribution any documents which,
to his knowledge, are such circulars as aforesaid, being documents of such a
nature as to show that the object or principal object of distributing them
would be to communicate such an invitation or such information as aforesaid.

(2) The preceding sub-section shall not apply

[(a)in relation to any distribution of a prospectus to which section
thirty-eight of the Companies Act (Northern Ireland), 1960, applies or would
apply if not excluded by paragraph (b) of sub-section (7) of that section or
by section thirty-nine of that Act or section three hundred and sixty-five of
that Act applies or would apply if not excluded by paragraph (b) of
sub-section (8) of that section or by section three hundred and sixty-six of
that Act or in relation to any distribution of a document relating to
securities of a corporation (not being a registered company) incorporated
under the law of some part of the United Kingdom, being a document which

(i)would, if the corporation were a registered company, be a prospectus to
which the said section thirty-eight applies or would apply if not excluded as
aforesaid, and

(ii)contains all the matters and is issued with the consents which, by virtue
of sections three hundred and sixty-five and three hundred and sixty-seven of
that Act it would have to contain and be issued with if the corporation were a
company incorporated outside the United Kingdom and the document were a
prospectus issued by that company, or

(b)in relation to any issue of a form of application for shares in, or
debentures of, a corporation, together with

(i)a prospectus which complies with the requirements of section thirty-eight
of the Companies Act (Northern Ireland), 1960, or is not required to comply
therewith because excluded by paragraph (b) of sub-section (7) of that section
or by section thirty-nine of that Act, or complies with the requirements of
Part XI of that Act and is not issued in contravention of section three
hundred and sixty-seven of that Act, or

(ii)in the case of a corporation (not being a registered company) incorporated
under the law of some part of the United Kingdom, a document containing all
the matters and issued with the consents mentioned in sub-paragraph (ii) of
paragraph (a) of this sub-section,

or in connection with a bona fide invitation to a person to enter into an
underwriting agreement with respect to the shares or debentures, or]

(c)in relation to any distribution of documents which is required or
authorised by or under any Act other than this Act or by or under any
enactment of the Parliament of the United Kingdom,

(3) This section shall not prohibit the distribution or possession of any
document by reason only

(a)that it contains an invitation or information

(i)made or given with respect to any securities by or on behalf of a member of
any recognised stock exchange or
recognised association of dealers in securities or by or on behalf of the
holder of a principal's licence, or

(ii)made or given with respect to any securities by or on behalf of the Bank
of England, any licensed bank or any exempted dealer, or

<(iii)made or given by or on behalf of a corporation to holders of securities of or to persons employed by, or to creditors of, that corporation or any other corporation which, in relation to the first mentioned corporation, is [a subsidiary company as defined by section one hundred and forty-eight of the Companies Act (Northern Ireland), 1960], with respect to securities of the first-mentioned corporation or of any such other corporation as aforesaid, or


<(iv)made or given by on behalf of the manager under an authorised unit trust scheme with respect to any securities created in pursuance of that scheme, or


(v)made or given by or on behalf of the Government of any part of His
Majesty's dominions or the Government of any foreign state, or by or on behalf
of any statutory corporation or municipal corporation, with respect to
securities of that Government or corporation, or

<(vi)made or given by or on behalf of any industrial and provident society or building society with respect to shares of the society, or loans or deposits which may be made to or with the society, or


<(vii)made or given to beneficiaries under a trust by or on behalf of a person acting in the capacity of a trustee of that trust, or


(viii)made or given with respect to any securities in connection only with a
sale or proposed sale of those securities by auction, or

(b)that it contains an invitation or information which a person whose ordinary
business or part of whose ordinary business it is to buy and sell any property
other than securities (whether as a principal or as an agent) may make or give
in the course of the business of buying and selling such property:

Provided that nothing in paragraph (a) of this sub-section shall authorise the
doing of anything in respect of securities created in pursuance of any
unit trust scheme which is not an authorised unit trust scheme; and nothing in
paragraph (b) of this sub-section shall authorise any person to do anything in
pursuance of, or for the purpose of, [any such arrangements as are mentioned
in paragraph (b) of sub-section (1) of the last preceding section].

(4) Documents shall not, for the purposes of this section, be deemed not to be
circulars by reason only that they are in the form of a newspaper, journal,
magazine or other periodical publication; but a person shall not be taken to
contravene this section by reason only that he distributes, or causes to be
distributed, to purchasers thereof, or has in his possession for the purpose
of distribution to purchasers thereof, copies of any newspaper, journal,
magazine or other periodical publication.

(5) A person shall not be taken to contravene this section by reason only that
he distributes documents to persons whose business involves the acquisition
and disposal, or the holding, of securities (whether as a principal or as an
agent), or causes documents to be distributed to such persons, or has
documents in his possession for the purpose of distribution to such persons.

(6) Any person who contravenes this section shall be liable, on conviction on
indictment, to imprisonment for a term not exceeding two years or to a fine
not exceeding five hundred pounds or to both such imprisonment and such fine
or, on summary conviction, to imprisonment for a term not exceeding six months
or to a fine not exceeding one hundred pounds or to both such imprisonment and
such fine.

(7) Proceedings for an offence under this section shall not be instituted
except by, or with the consent of, the Ministry or the Attorney General for
Northern Ireland:

Proviso rep. by 1975 c.59 s.14(5) sch.6 Pt.II

(8) If a justice of the peace is satisfied by information on oath that there
is reasonable ground for suspecting that, at any such premises as may be
specified in the information, a person has any documents in his possession in
contravention of this section, the justice may grant a warrant under his hand
empowering any constable to enter the premises, if necessary by force, at any
time or times within one month from the date of the warrant, and to search
for, and seize and remove, any documents found therein which he has reasonable
ground for believing to be in the possession of a person in contravention of
this section.

(9) Any document seized under this section may be retained for a period of one
month or, if within that period there are commenced any proceedings for an
offence under this section to which the document is relevant, until the
conclusion of those proceedings.

(10) Where any person is convicted of an offence under this section, the court
dealing with the case may make an order authorising the destruction, or the
disposal in any other specified manner, of any documents produced to the court
which are shown to its satisfaction to be documents in respect of which the
offence was committed:

Provided that an order under this sub-section shall not authorise the
destruction of a document, or the disposal of a document in any other manner,
until the conclusion of the proceedings in the matter of which the order is
made.

(11) Subject to the provisions of the last two preceding sub-sections, the
Police (Property) Act, 1897, (which makes provision with respect to the
disposal of property in the possession of the police) shall apply to property
which has come into the possession of the police in consequence of a seizure
under this section, as it applies to property which has come into the
possession of the police in the circumstances mentioned in that Act.

Stock exchanges and associations of dealers in securities.

© 1940 Crown Copyright

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