The Law Society is to amend the scope rules and the conduct of business rules to cover the conduct of newly regulated activities regarding mortgage business and general insurance.

This will enable the majority of solicitors to continue to take advantage of the part 20 exemption and avoid authorisation.

The changes are to come into effect because the Financial Services Authority (FSA) begins regulation of mortgage business on 31 October 2004 and general insurance on 14 January 2005.

From these dates it will be a criminal offence to undertake these business activities outside regulation.

Firms wishing to undertake these services after these dates must be authorised by the FSA.

Or they must be able to rely on an exemption, enabling them to carry on mortgage business and general insurance which is incidental to the firm's main business, from within the designated professional body regime supervised by the Law Society.

These amendments mean that unauthorised firms will, for example, be able to endorse a recommendation given to their clients by a person who is an authorised or exempt person in relation to advice on regulated mortgages, and will be able to deal as an agent in contracts of insurance.

Additional guidance on the amendments will be published shortly.

The Law Society maintains the firms that are most likely to want to provide mainstream mortgage advice or general insurance services will be those already authorised by the FSA, those firms that are registered with the Mortgage Code Compliance Board as intermediaries, and those that are members of the General Insurance Standards Council.

Any firm that is not currently authorised, but wishes to provide services that will need FSA authorisation, can now apply for an application pack.

The FSA will accept completed application packs from early 2004 and there will be discounted application fees for early return.

For mortgage business, firms must apply by 31 March 2004 for an early application discount and no later than 30 April 2004 to be certain of being authorised in time for when regulation comes into force.

For general insurance, firms must apply by 31 May 2004 for an early application discount and no later than 13 July 2004 to be certain of being authorised in time for when regulation comes into force.

Firms applying for both mortgage and general insurance authorisation need to submit their applications by 31 March 2004.

Firms seeking guidance and an application pack can contact the FSA's dedicated contact centre on 0845 605 5525.

Additional information about these changes can also be obtained by telephoning 0870 606 2577.