Here be dragons
Financial services regulation is very complicated. Non-compliance can have severe consequences. Professional legal counsel could assist in navigating the complex web of law, regulation, and precedent. It may seem unfair that things are so difficult - that's a result of financial services being inherently complicated topics, ones which are fought over by wealthy people/firms, and where there has been a long history of dodgy dealings of many kinds.
As an example of the difficulties involved, the law in general would like to distinguish between
- Investment advice given to a specific individual, taking all their personal circumstances and wishes into account, and
- Newspaper reports giving dispassionate information to the general public about the movement of share prices, but not telling them what to do in response; or completely generic advice like "it's good when the wiggly line goes up".
The second is "meant" to be basically OK and not the concern of the regulators; the first one is where all kinds of legal duties and protections come into play, since people might be disadvantaged by advisors who are inept or unscrupulous. Intuitively, D's app is somewhere between these, because it's not as if users are sitting down with a financial advisor and making trades, but they're also not just consuming generic data like a stock ticker. There is an element of prediction, expressing a range of envisaged outcomes, and potentially with "extra filters" that add some more personalization. So what does the law say about this?
Just looking at the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, Part II Chapter 12 and its form after two decades of tweaking tells us that there is a lot of complicated detail just in this regulation. We don't have to read or understand the words to see that there are a lot more of them, taking the apparently simple distinction above and trying to capture or carve out a range of activities not originally envisaged.
If we do start looking at the actual words, we can see several concepts that become relevant - "advice on the merits", "leading or enabling persons to buy or sell", and so on. These, and their predecessor words in older laws, have been thrashed out in the courts in ways that are not completely obvious. A recent case in the Court of Appeal, Adams v Options Personal Pensions UK LLP [2021] EWCA Civ 474, looks at some of this territory in paragraphs 69-82. We see here some phrases about whether the context of the information presented includes elements of comparison, evaluation, or persuasion; influencing the decision of the recipient as a result of a value judgement; giving purely factual information as opposed to matters such as a characterization of risk; and others. But, as quoted here from another decision, Rubenstein v HSBC Bank plc [2011] EWHC 2304 (QB), "To attempt any greater definition of the giving of advice in an investment context would be unwise and is probably impossible", which tells us that it's not easy to decide whether developer D's app is in or out.
You say "the app won't instruct users whether to buy or not" but courts have found a concept of "implied advice", where the context of the giving of information means that the customer will take it as advice. In Australia, the Federal Court recently found an implied recommendation, amounting to personal advice, had been given in a certain situation when customers were told supposedly general advice - even though there was an up-front disclaimer (ASIC v Westpac [2019] FCAFC 187). The specific law and facts are not the same as in this question, but the observation holds that disclaimers may not help if the surrounding marketing is communicating something else.
Similar remarks apply to the predictive model, where there is also plenty of regulation. In the FCA's Conduct of Business Sourcebook 4.5A.14, for example, there are binding rules about information on future performance. Whether these rules apply to what D is doing, and how they can comply, are hard questions. There is an entire publication, the Perimeter Guidance Manual, about how to know whether someone is covered by the regulator, but even that is full of maybes.
Aside from concerns with the regulators themselves, users may be very upset with D from time to time, and their anger might spill over into a legal claim. There is, again, a large body of law to do with such topics as negligence in giving investment advice.
All of the above is evidence that the question of compliance for a particular app or business is not completely simple. Professional advice can look at the whole context, as well as relevant law, and assist D in understanding their options.
