FSMA

Question 1

Regulated Activity

Answer 1

= Specified Investment + Specified Activity

Question 2

What are examples of the specified investments?

Answer 2

a) shares
b) instruments creating or acknowledging indebtedness - bonds / investor is lending money to a third party.
c) mortgage contracts

Question 3

What are examples of specified activities?

Answer 3

a) dealing in investments as principal or as agent . (buying, selling, subscribing for or under writing securities or contractually based investments)
b) arranging deals in investments
c) managing investments (ie exercising discretion); and
d) advising on the merits of investments

Question 4

what are the general exclusions for investments as a regulated activity?

Answer 4

The solicitor is just doing their normal job — meaning their main business isn’t offering regulated financial services
The financial activity is a necessary part of their legal work

Question 5

what are the general exclusions for specified activities

Answer 5

50%+ of voting shares are being bought or sold,

The deal is mainly about getting day-to-day control of the company.

Question 6

Exempt activity requirement

Answer 6

qualified professional, e.g. a solicitor

They can’t receive commission from third parties unless they pass it on to the client.

The regulated activity must be incidental to their main professional services.

Question 7

exempt, excluded or both?

Answer 7

Excluded (under RAO) Not a regulated activity → FSMA doesn’t apply. ✅

Not excluded, but exempt (under FSMA s.327)
Regulated activity → but can be carried out without authorisation if conditions are met. ✅