FSMA

FSMA

FSMA 2000

The general prohibition is set out at s19(1) FSMA 2000.

“No person may carry on a regulated activity in the United Kingdom or purport to do so unless he is –

(a)  an authorised person; or

(b)  an exempt person.”

S22 FSMA 2000 sets out what a regulated activity is:  

“(1)  An activity is a regulated activity for the purposes of this Act if it is an activity of a specified kind which is carried on by way of business and—

(a)   relates to an investment of a specified kind; or

(b)   in the case of an activity of a kind which is also specified for the purposes of this paragraph, is carried on in relation to property of any kind.

(2)   Schedule 2 makes provision supplementing this section.

(3)   Nothing in Schedule 2 limits the powers conferred by subsection (1).

(4)   “Investment” includes any asset, right or interest.

(5)   “Specified” means specified in an order made by the Treasury.”

 Are you in business?

 Yes. A firm of solicitors falls within the definition set out in the case of Smith v Anderson.

NB pro bono work is caught here.

 Is this a specified activity?

 Yes – advising – Art 53 Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO).

 Is it a specified investment?

 Yes, currently the proposal only involves shares – Art 76 RAO. However, as lending money to the company will undoubtedly be discussed and may form part of any counter proposal, loans are also a specified investment – Art 77 RAO.

Therefore, advising will be…