QUESTION OF ETHICSQ I haven't yet got my head around all the changes in financial services.

What are the Scope Rules and what do they allow my firm to do?A The Financial Services Authority (FSA) requires designated professional bodies (DPB) such as the Law Society to have rules 'designed to secure that in providing a particular service to a particular client, the member carries on only regulated activities which arise out of, or are complementary to, the provision by him of that service to that client'.

These are the Solicitors' Financial Services (Scope) Rules 2001, (the Scope Rules), and the Solicitors' Financial Services (Conduct of Business) Rules 2001.

The Scope Rules set out the scope of the activities which may be undertaken by firms as part of the DPB regime; activities which solicitors may undertake without having to opt into authorisation with the FSA.

These are referred to as 'exempt regulated activities'.

The rules contain a list of the prohibited activities, basic conditions which must be satisfied when conducting exempt regulated activities, and other restrictions relating to particular types of activities and investments.

The Scope Rules are set out in the Law Society's information pack, and have also been posted on our Web site (www.lawsociety.org.uk)Please noteInvestment businessUnder the Financial Services and Markets Act 2000, most firms now doing non-discrete investment business only will no longer need authorisation and need not return the FSA's opt-in form.

These firms will come within the designated professional body regime (as members of the Law Society) and there is no need to register with the Law Society.

Most firms now doing discrete investment business (or authorised by other regulators) will need to be authorised by the FSA, and must complete and return the FSA's opt-in form by 31 October 2001.l Question of ethics is compiled by the Law Society's professional ethics guidance team.

Send questions to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch; tel: 020 7242 1222.