(1)If an authorised person other than a PRA-authorised person carries on a regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with permission—
(a)given to that person under Part 4A, or
(b)resulting from any other provision of this Act,
he is to be taken to have contravened a requirement imposed on him by the FCA under this Act.
(1A)If a PRA-authorised person carries on a regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with permission given to the person under Part 4A or resulting from any other provision of this Act, the person is to be taken to have contravened—
(a)a requirement imposed by the FCA, and
(b)a requirement imposed by the PRA.
(2)A contravention within subsection (1) or (1A)—
(a)does not, except as provided by section 23(1A), make a person guilty of an offence,
(b)does not, except as provided by section 26A, make any transaction void or unenforceable, and
(c)does not, except as provided by subsection (3), give rise to any right of action for breach of statutory duty.
(3)In prescribed cases a contravention within subsection (1) or (1A) is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.
(4)Subsections (1) and (1A) are subject to section 39(1D).
(5)References in this Act to an authorised person acting in contravention of this section are references to the person acting in a way that results in a contravention within subsection (1) or (1A).
Cases considering section 20 (5)
[2026] UKSC 11 · 1 April 2026Interprets
An authorised person acting beyond its permission breaches regulatory obligations. This does not mean that it ceases to be an authorised person (see paras [7], [83]).
Acting outside an authorised person’s permission does not constitute a criminal offence and generally does not invalidate transactions, contrasting with an appointed representative acting outside its exemption (see paras [7], [11]).
Cited as part of the provisions under which an authorised person acting outside its permission may face compensation claims (see para [7]).
Cited as part of the provisions under which an authorised person acting outside its permission may face compensation claims (see para [7]).
[2011] EWHC 2562 (Ch) · 7 October 2011Interprets
Interprets s. 20 as applying where an authorised person carries on or purports to carry on a regulated activity without permission. A contravention is actionable only where the claimant suffers loss as a result, subject to the incidents and defences applicable to breach of statutory duty (see paras [20]; [34]-[36]).
Confirms that a contravention gives a right of action only to a person who suffers loss as a result, with the defences and incidents applicable to breach of statutory duty (see para [20]).
[2008] EWHC 1782 (Ch) · 25 July 2008Interprets
The court confirms that contravention of an authorisation requirement did not make later policies void or unenforceable. The policies remained enforceable against WIC (see paras [42]-[44]).
The court interprets the loss requirement as preventing a claim for repayment of premiums where the policyholder received enforceable cover and would otherwise have purchased equivalent insurance. Unpaid policy claims remained provable (see paras [42]-[44]).
What each judgment says about section 20 is in the case-law panel in the full Act.
56.Authorised persons may only carry on in the United Kingdom those regulated activities for which they have been given permission by the Authority under Part IV or by or under any other provision of the Act, for example under Schedule 3, 4 or 5.
57.If an authorised person carries on regulated activities for which he does not have permission the consequences may include any of the sanctions available under Parts IV (Permission to Carry on Regulated Activities), XIII (Incoming Firms: Intervention by Authority) or XIV (Disciplinary Measures). However, if an authorised person acts outside the scope of his permission, he will not commit a criminal offence, and any contract which a person enters into when acting outside the scope of his permission will not be made unenforceable simply by virtue of that fact. Subsection (3) permits the Treasury to prescribe cases in which a breach permission gives rise to a right of action for damages.