Protection of Depositors Act 1963

JurisdictionUK Non-devolved
Citation1963 c. 16


Protection of Depositors Act 1963

1963 CHAPTER 16

An Act to penalise fraudulent inducements to invest on deposit; to restrict and regulate the issue of advertisements for deposits; to make special provision with respect to the accounts to be delivered by and the supervision of companies which issue such advertisements; to amend section 13 of the Prevention of Fraud (Investments) Act 1958; and for purposes connected with the matters aforesaid.

[10th July 1963]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

General provisions for protection of depositors

General provisions for protection of depositors

S-1 Fraudulent inducement to invest on deposit.

1 Fraudulent inducement to invest on deposit.

(1) Any person who, by any statement, promise or forecast which he knows to be misleading false or deceptive, or by any dishonest concealment of material facts, or by the reckless making (dishonestly or otherwise) of any statement, promise or forecast which is misleading, false or deceptive, induces or attempts to induce another person—

(a ) to invest money on deposit with him or with any other person, or

(b ) to enter into or offer to enter into any agreement for that purpose,

shall be guilty of an offence, and liable on conviction on indictment to imprisonment for a term not exceeding seven years or to a fine, or to both.

(2) Nothing in this section shall be construed as empowering a court in Scotland, other than the High Court of Justiciary, to pass for any offence under this section a sentence of imprisonment for a term exceeding two years.

(3) In section 13 (1) (a ) (i) of the Prevention of Fraud (Investments) Act 1958, the words ‘or lending or depositing money to or with any industrial and provident society or building society’ are hereby repealed.

S-2 General restriction of advertisements for deposits.

2 General restriction of advertisements for deposits.

(1) Subject to the following provisions of this section, no person shall, after the commencement of this Act, issue any advertisement inviting the public to deposit money with him.

(2) This section does not apply to any advertisement with respect to investments of any description falling within Schedule 1 to the Trustee Investments Act 1961, nor to any advertisement with respect to deposits of any description to be made with any banking or discount company within the meaning of paragraph 23 of Schedule 8 to the Companies Act 1948, or with any building society, friendly society or industrial and provident society.

(3) This section does not apply to any advertisement with respect to deposits to be made with a company incorporated in, or having an established place of business in, Great Britain, if the advertisement complies with regulations made by the Board of Trade under section 3 (1) (a ) and any accounts required by this Act to be delivered by the company before the issue of the advertisement are duly delivered.

(4) This section does not apply—

(a ) to an advertisement with respect to deposits of any such class as may be prescribed by regulations made by the Board of Trade under section 3 (1) (b ); or

(b ) to any advertisement (not being an advertisement with respect to deposits to be made with any such company as is mentioned in subsection (3)) which is issued with the permission in writing of the Board;

and any permission for the purposes of paragraph (b ) may be granted in respect of a particular advertisement or in respect of advertisements of any specified class issued by a particular person, and subject to such conditions, if any, as the Board think fit.

(5) Any person who issues an advertisement in contravention of this section shall be guilty of an offence and liable—

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

(b ) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding two hundred pounds, or to both:

Provided that a person who in the ordinary course of his business issues an advertisement to the order of another person, being an advertisement the issue of which by that other person constitutes an offence under this section, shall not himself be guilty of the offence if he proves that the matters contained in the advertisement were not (wholly or in part) devised or selected by him or by any person under his direction or control.

S-3 Regulations of Board of Trade as to advertisements.

3 Regulations of Board of Trade as to advertisements.

(1) The Board of Trade may by statutory instrument make regulations—

(a ) for prescribing the matters which must or must not be included in any advertisement which is to qualify for exemption under subsection (3) of section 2, and generally for regulating the form of such advertisements;

(b ) for exempting from that section advertisements with respect to deposits of such classes as may be prescribed by the regulations subject to such conditions, if any, as may be so prescribed.

(2) Regulations under this section may make different provision in relation to advertisements of different classes or descriptions.

(3) Any statutory instrument made by virtue of this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

S-4 Status of private companies which advertise for deposits.

4 Status of private companies which advertise for deposits.

4. If an advertisement for deposits is issued after the commencement of this Act by a private company, the company shall, so long as the provisions of this Act as to periodical accounts apply to the company, be deemed not to be a private company for the purposes of the following provisions of the Companies Act 1948, that is to say:—

a ) section 31, section 222 (d ) and paragraph (a ) of the proviso to section 224 (1) (several liability of members power of the court to wind up, and power of contributors to petition for winding up, on reduction of number of members below the statutory minimum)
b ) section 129 (exemption from requirements of section 127 as to documents to be annexed to annual return)
c ) section 161 (1) and (2) (qualification of auditors);
d ) section 176 (number of directors); and
e ) section 190 (1) (prohibition of loans to directors).
Special accounting obligations of companies advertising for deposits

Special accounting obligations of companies advertising for deposits

S-5 Accounts required before advertising.

5 Accounts required before advertising.

(1) Before any advertisement for deposits is issued by any company after the appointed day, the company shall deliver to the Registrar and the Board of Trade accounts complying with the requirements of this section.

(2) The accounts required under this section in connection with an advertisement for deposits are—

(a ) in every case, audited accounts comprising—

(i) a balance sheet dated not more than fifteen months before the date on which the advertisement is issued, and

(ii) a profit and loss account for the period between the date of that balance sheet and that of the last relevant balance sheet which was dated not less than six months before that date; and

(b ) where the date of the balance sheet comprised in the accounts delivered for the purposes of paragraph (a ) is more than nine months before the date on which the advertisement is issued, interim accounts comprising—

(i) a balance sheet dated not less than six months after the date of the first-mentioned balance sheet, and

(ii) a profit and loss account for the period between the dates of those balance sheets.

(3) In this section ‘relevant balance sheet’ means a balance sheet comprised in accounts delivered by the company for the purposes of any provision of this Act requiring the delivery of audited accounts or, where no such balance sheet has been so delivered, an audited balance sheet laid before the company in general meeting.

(4) Within fourteen days after the first occasion after the appointed day on which an advertisement for deposits is issued by a company which has delivered the accounts required by this section, the company shall deliver to the Registrar and the Board of Trade a notice specifying the date on which the advertisement was issued.

S-6 Periodical accounts after advertising.

6 Periodical accounts after advertising.

(1) Every company which issues an advertisement for deposits after the appointed day shall from time to time (unless and until this section ceases to apply to the company under the following provisions of this Act) deliver to the Registrar and the Board of Trade accounts complying with the requirements of this section.

(2) The accounts required to be delivered by a company to which this section applies are—

(a ) audited accounts, each comprising—

(i) a balance sheet dated twelve months after the date of the balance sheet last delivered by the company for the purposes of any provision of this Act requiring the delivery of audited accounts, and

(ii) a profit and loss account for the period between the dates of those balance sheets; and

(b ) interim accounts, each comprising—

(i) a balance sheet dated six months after the date of the balance sheet last delivered as aforesaid, and

(ii) a profit and loss account for the period between the dates of those balance sheets;

and those accounts shall be delivered, in the case of the audited accounts described in paragraph (a ), within fifteen months, and in the case of the interim accounts described in paragraph (b ), within nine months, of the date of the balance sheet last delivered as aforesaid.

(3) Where...

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