Financial Services and Markets Act 2000, section 23

Contravention of the general prohibition or section 20(1) or (1A)

Part II Regulated And Prohibited Activities

(1)A person who contravenes the general prohibition is guilty of an offence and liable—

(a)on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;

(b)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

[F154 (1A) An authorised person (“A”) is guilty of an offence if A carries on a credit-related 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.

(1B) In this Act “credit-related regulated activity” means a regulated activity of a kind designated by the Treasury by order.

(1C)The Treasury may designate a regulated activity under subsection (1B) only if the activity involves a person—

(a)entering into or administering an agreement under which the person provides another person with credit,

(b)exercising or being able to exercise the rights of the lender under an agreement under which another person provides a third party with credit, or

(c)taking steps to procure payment of debts due under an agreement under which another person is provided with credit.

(1D)But a regulated activity may not be designated under subsection (1B) if the agreement in question is one under which the obligation of the borrower is secured on land.

(1E) “Credit” includes any cash loan or other financial accommodation.

(1F)A person guilty of an offence under subsection (1A) is liable—

(a)on summary conviction, to imprisonment for a term not exceeding the applicable maximum term or a fine not exceeding the statutory maximum, or both;

(b)on conviction on indictment, to imprisonment for a term not exceeding two years, or a fine, or both.

(1G) The “applicable maximum term” is—

(a)in England and Wales, [F155 the general limit in a magistrates’ courtF155] (or 6 months, if the offence was committed before the commencement of [F156 2 May 2022F156] );

(b)in Scotland, 12 months;

(c)in Northern Ireland, 6 months.F154]

(2) In this Act “an authorisation offence” means an offence under this section.

(3)In proceedings for an authorisation offence it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

[F157 (4)Subsection (1A) is subject to section 39(1D).

(5)No proceedings may be brought against a person in respect of an offence under subsection (1A) in a case where either regulator has taken action under section 205, 206 or 206A in relation to the alleged contravention within section 20(1) or (1A).F157]

Read section 23 in the full Act → Definitions (5) Cases (29)

Definitions used in section 23

general prohibition

“general prohibition” has the meaning given in section 19(2);

Defined in s.417(1) · see it in the full Act
authorised person

“authorised person” has the meaning given in section 31(2);

Defined in s.417(1) · see it in the full Act

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Defined in s.31(2) · see it in the full Act
regulated activity

“regulated activity” has the meaning given in section 22;

Defined in s.417(1) · see it in the full Act
administering

(6A) For the purposes of subsection (1A)(c), “benchmark” has the meaning given by Article 3 of the EU Benchmarks Regulation 2016, and “administering” a benchmark means acting as an administrator of that benchmark within the meaning of that Article.

Defined in s.22(6A) · see it in the full Act
regulator

“regulator” has the meaning given in section 3A(2);

Defined in s.417(1) · see it in the full Act

Cases considering section 23 (29)

Kession Capital Ltd (in Liquidation) v KVB Consultants Ltd and others

[2026] UKSC 11 · 1 April 2026

An appointed representative conducting regulated activity outside its section 39 exemption commits an offence. Construing client restrictions as defining part of the business preserves that consequence for prohibited retail business (see paras [11], [41], [70]).

City of York Council, R (on the application of) & v AUH & Ors

[2023] EWCA Crim 6 · 16 January 2023

The court treated illegal moneylending as an offence under the post-transfer statutory regime and a relevant offence for the purposes of the power conferred by the 2013 Order (see paras [28], [36]–[39]). The court referred to the illegal-moneylending charge as contrary to section 23(1) when identifying the relevant offence under the post-transfer scheme (see para [28]). The court referred to the Birmingham illegal-moneylending charge as contrary to section 23(2) in describing the indictment (see para [5]).

Fortwell Finance Ltd v Halstead & Anor

[2018] EWCA Civ 676 · 28 March 2018Limits

The court relied on the criminal liability created by contravention of the general prohibition to reject an interpretation which could make a lender’s bona fide compromise of a payment dispute an authorisation offence. (see paras [50]-[52]) Treating a compromise as administration would make the due-diligence defence difficult or impossible on the assumed facts, because the lender would voluntarily act with knowledge that the activity was regulated. That consequence supported the court’s interpretation. (see para [51])

9 more judgments, and what each says about section 23, are in the case-law panel in the full Act.

Explanatory note

65.This section makes carrying on a regulated activity in breach of the general prohibition a criminal offence.  It is a defence for a person to prove that he exercised due diligence and took all reasonable precautions to avoid committing the offence.

66.A person convicted of this offence, which is referred to as an “authorisation offence”, may be subject to a term of imprisonment of up to 2 years if convicted on indictment (6 months on summary conviction) and/or a fine (the current statutory maximum for a fine on summary conviction is £5,000).

All the explanatory notes for the Act

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F153Words in s. 23 heading inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 3(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  2. F154S. 23(1A)-(1G) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 3(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  3. F155Words in s. 23(1G)(a) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1 table
  4. F156Words in s. 23(1G)(a) substituted (28.4.2022) by The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500), regs. 1(2), 5(1), Sch. Pt. 1
  5. F157S. 23(4)(5) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 3(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.