Legal Services

Question 1

When will advice constitute a regulated activtity under FSMA?

Answer 1

Advise on merits of buying or selling regulated investment (e.g. shares)

Includes legal advice if it relates to the merits. Limiting advice to legal structure without touching on financial aspects may not constitute a regulated activity but will depend on the context.

NOTE: providing advice probono or longstanding relationship with client does not exempt requirement for authorisation

Question 2

How to calculate CFA

Answer 2

1. Calculate Success Fee (normal fee x percentage)
2. Add normal fee

If PI the total is capped at 25% of damages.

Client will always have to pay solicitor’s uplift (must be deducted from total when solicitor remits back). If Client is awarded costs, then they may recover basic fee and disbursements (not have these deducted from damages)

Question 3

How long should record of transactions be kept under POCA

Answer 3

5 years following completion

Question 4

POCA and Regulations

Answer 4

POCA: establishes money laundering offences which apply to ALL + offences which apply to people in regulated sector.

Regulations: Only apply to relevnt persons and require the firms and its staff to know and monitor clients, CDD and train their staff. Aim is to prevent money laundering.

Breaches of either are criminal offences subject to imprisonment

Question 5

MLR requirement for timing of customer due diligence

Answer 5

Must be arreid out if a person establishes a business relationship.

Should be carried out before relationship is established or ASAP after commencement of transaction (NOT by the time transaction comes to an end)