Top firms unite over FSA fear

Top City practices could lead a stampede of corporate law firms seeking authorisation from the Financial Services Authority (FSA) this week, after the Treasury refused to amend its new Financial Promotions Order.The order, created under the Financial Services and Markets Act 2000, regulates inducements and invitations to enter financial agreements, but lawyers argue that the current wording might catch much of their corporate activity and - to be safe - they may need to obtain precautionary regulation from the FSA.Earlier this year a consortium of City firms - made up of Clifford Chance, Linklaters, Freshfields, Allen & Overy, Slaughter and May, Herbert Smith, Lovells and Norton Rose - wrote to the Treasury asking it to amend the order to assuage fears.In the last fortnight, Denton Wilde Sapte, Travers Smith Braithwaite, Rowe & Maw, CMS Cameron McKenna, Dechert, Ashurst Morris Crisp, Macfarlanes and Simmons & Simmons have written their own joint letter to the Treasury repeating the request.An emergency meeting will take place at Freshfields this week for the firms to decide whether they should immediately apply for regulation, or take the view that authorisation is not required.If they opt for regulation, chaos could be unleashed as smaller corporate firms around the country follow their lead and seek FSA protection.Rowe & Maw partner Peter Richards-Carpenter said the order as drafted could catch solicitors arranging and sending shareholders agreements, and arranging meetings to discuss deals.He said: 'I think we should take a unified view and stand firm against authorisation.

To do otherwise would scupper the government's intention that solicitors should not fall under the FSA regulation.'A Treasury spokesman said they were considering the correspondence.A Law Society spokeswoman said: 'The Society knows the exemptions in the order are problematic, particularly for corporate firms, but believes it is a matter of judgement for individual firms, based on the nature of their work, as to whether they can operate safely within the exemptions.

We will continue to lobby for change.'Jeremy Fleming