How a law firm can carry on regulated financial services work without FCA authorisation, and the strict conditions that keep it inside the section 327 exemption.
Step outside the exemption and the stakes are serious: carrying on a regulated activity without authorisation is a criminal offence and can render agreements unenforceable. This chapter begins with the general prohibition under the Financial Services and Markets Act, the preliminary question of whether an activity is regulated at all, and the effect of exclusions under the Regulated Activities Order. It then works through the cumulative conditions of the section 327 exemption — the identifiable client, the link to legal services, and the treatment of third-party rewards — before turning to the activities the SRA Scope Rules put off limits and the Conduct of Business Rules on status disclosure, commission and insurance distribution. It closes with the consequences of breaching the general prohibition and the alternative of seeking FCA authorisation for activities the exemption cannot cover.
