QUESTION OF ETHICS

Q What are the basic conditions that must exist for solicitors to be able to do investment business within the Law Society's designated professional body regime without being authorised under the Financial Services and Markets Act 2000?A If solicitors are intending to work within the framework of the Law Society's regime as a designated professional body (DPB), they will need to comply with the basic conditions set out in rule 4 of the Solicitors' Financial Services (Scope) Rules 2001.

These basic conditions are derived from the Financial Services and Markets Act 2000.

In particular, solicitors will need to be mindful of the following conditions:l The activities must arise out of, or be complementary to, the provision of a particular professional service to a particular client;l The manner of the provision by the firm of any service in the course of carrying on the activities must be incidental to the provision by the firm of professional services;l The firm must account to the client for any pecuniary reward or other advantage which the firm receives from a third party.

Firms coming within the DPB regime do not need to seek individual authorisation.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 for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch;tel: 020 7242 1222.