The SRA, through the Law Society, is a designated professional body under Part 20 of FSMA. This means that firms (including sole practices) authorised by us may carry on certain regulated financial services activities without being regulated by the FCA if they can meet the conditions in section 327 of FSMA.
The SRA Financial Services (Scope) Rules set out the scope of the regulated financial services activities that may be undertaken by firms authorised by us and not regulated by the FCA. These rules regulate the way in which firms carry on such exempt regulated financial services activities and the way in which firms that are dually regulated by us and the FCA carry on their non-mainstream regulated activities.
These rules do not apply to solicitors, RELs and RFLs practising outside firms that are authorised by us.
This introduction does not form part of the SRA Financial Services (Conduct of Business) Rules.
"[This firm is]/[We are] not authorised by the Financial Conduct Authority. However, we are included on the register maintained by the Financial Conduct Authority so that we can carry on insurance distribution activity, which is broadly the advising on, selling and administration of insurance contracts. This part of our business, including arrangements for complaints or redress if something goes wrong, is regulated by the Solicitors Regulation Authority. The register can be accessed via the Financial Conduct Authority website at www.fca.org.uk/firms/financial-services-register."
You must ensure that where you have agreed or decided in your discretion to effect a transaction, you must do so as soon as possible, unless you reasonably believe that it is in the client's best interests not to.
Where you undertake the regulated financial services activity of safeguarding and administering investments, you must operate appropriate systems, including the keeping of appropriate records, which provide for the safekeeping of assets entrusted to you by clients and others.
the procedures allowing clients and other interested parties to register complaints about you and information about the out-of-court complaint and redress procedures available for the settlement of disputes between you and your clients;
whether you are representing the client or acting for and on behalf of the insurer;
Notwithstanding your complaints handling obligations in the SRA Code of Conduct for Firms, you must have in place and operate appropriate and effective procedures for registering and responding to complaints from a person who is not a client.
on a website (where it does not constitute a durable medium) where the following conditions are satisfied:
the provision of that information by means of a website is appropriate in the context of the business conducted between you and the client;
the client has consented to the provision of that information by means of a website;
the client has been notified electronically of the address of the website, and the place on the website where that information can be accessed; and
you ensure that the information remains accessible on the website for such period of time as the client may reasonably need to consult it.
For the purposes of rules 18.2(a)(i) and (b)(i), the provision of information using a durable medium other than paper or by means of a website shall be regarded as appropriate in the context of the business conducted between you and the client if there is evidence that the client has regular access to the internet. The provision by the client of an e-mail address for the purposes of that business is sufficient evidence.
You must communicate the information:
in a clear and accurate manner, comprehensible to the client;
in an official language of the Member State in which the insured risk, or proposed insured risk, is situated or in any other language agreed upon by the parties; and
free of charge.
Where you communicate the information using a durable medium other than paper or by means of a website, you must, upon request and free of charge, send the client a paper copy of the information.
You must ensure that a client's choice or consent to receive the information by means of a website (whether a durable medium or where the conditions under rule 18.2(b) are satisfied) is an active and informed choice or consent.
In the case of services supplied to the client by telephone that are subject to the Financial Services (Distance Marketing) Regulations 2004:
the information must be given in accordance with those regulations; and
When you offer a non-insurance ancillary product or service as part of a package or in the same agreement with an insurance product, you must:
inform the client whether it is possible to buy the components separately and, if so must provide the client with an adequate description of:
the different components;
where applicable, any way in which the risk or insurance coverage resulting from the agreement or package differs from that associated with taking the components separately; and
provide the client with separate evidence of the charges and costs of each component.
When you offer an insurance product ancillary to and as part of a package or in the same agreement with a non-insurance product or service, you must offer the client the option of buying the non-insurance goods or services separately.
Rule 19.2 does not apply where the non-insurance product or service is any of the following:
a payment account as defined in point 3 of Article 2 of Directive 2014/92/EU.
Rule 19 shall not prevent the distribution of insurance products which provide coverage for various types of risks (multi-risk insurance policies).
In the cases referred to in rules 19.1 and 19.2, you must still comply with other provisions in this Part relating to the offer and sale of insurance products that form part of the package or agreement, including specifying the demands and needs of the client in accordance with rule 12.
railway rolling stock, aircraft, ships (sea, lake, river and canal vessels), goods in transit, aircraft liability and liability of ships (sea, lake, river and canal vessels);
credit and suretyship, where the policyholder is engaged professionally in an industrial or commercial activity or in one of the liberal professions, and the risks relate to such activity;
land vehicles (other than railway rolling stock), fire and natural forces, other damage to property, motor vehicle liability, general liability, and miscellaneous financial loss, in so far as the policyholder exceeds the limits of at least two of the following three criteria:
balance sheet total: £6.2 million;
net turnover: £12.8 million;
average number of employees during the financial year: 250.
Part 4: Credit-related regulated financial services activities
Where you carry on the activity of credit broking, you must indicate in any advertising and documentation intended for consumers or clients the extent and scope of your credit broking activities, in particular whether you work exclusively with one or more lenders or as an independent broker.
when providing such explanations, comply with the requirements of Article 5(6) of the Directive 2008/48/EC on credit agreements for consumers.
Before entering into a regulated credit agreement as lender, you must assess the client's creditworthiness on the basis of sufficient information to enable you to make the assessment, where appropriate such information will be obtained from the client and, where necessary, from a credit reference agency.
After entering into a regulated credit agreement where you are the lender, if the parties agree to change the total amount of credit, you must update the financial information you hold concerning the client and assess the client's creditworthiness before any significant increase in the total amount of credit.
Where you are entitled to payments from the same client in respect of two or more regulated credit agreements, you must allow the client to put any payments made, in respect of those agreements, towards the satisfaction of the sum due under any one or more of the agreements in such proportions as the client thinks fit.
Made under section 31 of the Solicitors Act 1974, section 9 of the Administration of Justice Act 1985, section 83 of the Legal Services Act 2007 and section 332 of the Financial Services and Markets Act 2000.
SRA Financial Services (Conduct of Business) Rules
You are reading current version in effect from 25 November 2019