Feeds

The cuckoos in the Net incubator nest

A bit lax on the old regulation front

  • alert
  • submit to reddit

New hybrid storage solutions

Internet incubators could find themselves at the wrong end of legal action, according to the Financial Times. The companies offer consultation services and sometimes investment in return for stakes in hatchling net businesses.

Many new incubators have failed to ask for authorisation under the Financial Services Act, because they thought it did not apply to them. But if they do not qualify for one of the exemptions or exclusions in the act, they may be breaking the law.

"There is a real risk people believe there isn't a problem because they think they are just running parties or are just investing their own money," said Margaret Chamberlain, a partner at law firm Travers Smith Braithwaite. "To carry out investment business without authorisation is a criminal offence."

The part of the act that is causing the trouble concerns the concept of arranging investments. A person who runs any kind of infrastructure allowing people to make deals may be subject to the requirements of the act. Companies could also find themselves in trouble if they were considered to be "advising" investors or "dealing" as an agent or principal.

The Financial Services Authority says there has been a recent, small, increase in applications for authorisation from incubators.®

The next step in data security

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.