Business Law Flashcards
(2 cards)
Question:
A solicitor, not authorised by the Financial Conduct Authority (FCA), advises a client on purchasing the entire issued share capital of a private limited company. Has the solicitor breached the general prohibition against carrying on a regulated activity under the Financial Services and Markets Act 2000?
Incorrect Answer:
E - No, because an exclusion applies if the transaction involves at least 50% of the voting shares in the company.
Correct Answer:
C - No, because an exemption applies to professional firms which are supervised by the Solicitors Regulation Authority when they engage in corporate work
Advising on or arranging deals in investments (e.g., shares) is a regulated activity requiring FCA authorisation. However, professional firms (like solicitors regulated by the Solicitors Regulation Authority) are exempt when providing corporate work incidental to their professional services, as per the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. No exclusion exists based on the percentage of voting shares (e.g., 50%), making option E incorrect.
