1. The 1st appellant is a company of which the 2nd appellant is the Chief Executive Officer and provides investment advice. The 1st appellant sent an email to various recipients, announcing the launch of a fund (“the Fund”) and attaching a press release to the same effect. The 1st appellant’s website also published documents relating to the Fund. 2. The appellants were charged under section 103(1) of the Securities and Futures Ordinance (“SFO”), which makes it an offence to issue advertisements, invitations or documents relating to investments subject to various exemptions under section 103(3). 3. The Magistrate acquitted the appellants. He found that since the appellants had adopted screening procedures to ensure that the Fund was available to professional investors only, the Fund was or was intended to be available solely to professional investors. Accordingly, the exemption in section 103(3)(k) of the SFO applied. 4. V Bokhary J allowed the respondent’s appeal and remitted the case to the Magistrate. The Judge held that for section 103(3)(k) to apply it was necessary for it be seen from the advertisement itself whether it was, by its terms, confined to professional investors to the exclusion of other members of the investing public. She also held that the carrying out of the screening process was irrelevant. 5. There were two questions before the Court. First, whether for section 103(3)(k) to be applicable, it must be seen from the advertisement, invitation or document itself, that it is, by its terms, confined to professional investors to the exclusion of other members of the investing public. Second, whether the carrying out of a screening process to ensure that all investors investing in the collective investment scheme are professional investors is irrelevant. 6. For the following reasons, the Court answered “No” to each question and held that the exemption applies if, as a matter of fact, the relevant investment product is or is intended to be sold only to professional investors:- a. First, according to section 103(3)(k), the advertisement must be “made in respect of” one of the relevant products. This is a wide expression and suggests that the exemption applies to advertisements having some connection or relation to the investment products disposed of only to professional investors. b. Secondly, when an advertisement must contain a particular express statement in order for an exemption to the application of section 103(1) to apply, the Legislature has clearly and expressly stated this and identified the substance of the particular form of words to be used. This is absent in section 103(3)(k). c. Thirdly, the purpose of sections 103(1) and 103(3)(k) is to protect retail investors against exposure to an unsuitable investment product. This purpose will be achieved if the defendant is required to demonstrate that the relevant investment is in fact intended solely for professional investors, without reference to the express wording of the advertisement in question. d. Lastly, where a statutory provision is ambiguous, unclear or open to two reasonable interpretations, its penal effect may indicate a narrower interpretation. Had the proper interpretation of section 103(3)(k) not been clear, there would have been some scope for the application of this principle. 7. Accordingly, the Court unanimously allowed the appeal and set aside the Judge’s order remitting the case to the Magistrate. The Magistrate’s subsequent convictions following the remitter are under appeal and its outcome will follow this judgment.