Why no one may carry on a regulated activity in the UK without authorisation or exemption — and where solicitors' firms fit within that rule.
A firm that strays into regulated activity without realising it faces criminal liability, unenforceable agreements and regulatory action, so the boundaries of FSMA 2000 matter as much as the rule itself. This chapter begins with the general prohibition and the three elements that make an activity regulated, then sets out the twin-peaks model under which the FCA and PRA divide responsibility, with the SRA overseeing solicitors' firms. It moves through the lawful routes — direct authorisation, appointed representative status and reliance on an exclusion — before examining the Part XX exemption for professional firms in detail, including the incidental condition, the treatment of commission and the required disclosures, alongside the key RAO exclusions for arrangements not causing a deal and introductions. It closes with what breach actually costs: criminal penalties, unenforceable agreements and client recovery, FCA enforcement powers, and the SRA Principles engaged.
