header-logo header-logo

FCA authorisation risk

16 October 2014
Issue: 7626 / Categories: Legal News
printer mail-detail

Family lawyers who advise clients on the financial aspects of their divorces, and firms involved in debt recovery work, may have to be authorised by the Financial Conduct Authority (FCA) in future.

The Solicitors Regulation Authority (SRA) says it is aware of more than 1,100 firms that carry out debt recovery, one area of consumer credit work. Solicitors could require FCA authorisation if they discuss finance with a divorce client and negotiate terms with creditors on behalf of that client for settlement of a joint debt. A solicitor advising on a property deal who seeks to amend information held by a credit information agency about their client’s financial standing would also be caught.

Authorisation became an issue on 1 April, when regulation for consumer credit work passed from the Office of Fair Trading to the FCA. Previously, solicitors were regulated under a group licence managed by the SRA. However, the FCA has not continued this arrangement, and transitional arrangements are due to run out on 1 April 2015.

Firms could then rely on an exemption which allows them to be overseen by a “designated professional body”—the SRA, in this case. However, the SRA is reluctant to adopt the required parts of the FCA’s sourcebook, called CONC.

Crispin Passmore, SRA executive director for policy, says: “It is vital that clients receive the proper protections, and the FCA are much better placed to regulate these activities than we are.”

An SRA consultation on the issue runs until 15 December 2014.

Issue: 7626 / Categories: Legal News
printer mail-details

MOVERS & SHAKERS

Freeths—Ruth Clare

Freeths—Ruth Clare

National real estate team bolstered by partner hire in Manchester

Farrer & Co—Claire Gordon

Farrer & Co—Claire Gordon

Partner appointed head of family team

mfg Solicitors—Neil Harrison

mfg Solicitors—Neil Harrison

Firm strengthens agriculture and rural affairs team with partner return

NEWS
Conveyancing lawyers have enjoyed a rapid win after campaigning against UK Finance’s decision to charge for access to the Mortgage Lenders’ Handbook
The Crown Prosecution Service (CPS) has launched a recruitment drive for talented early career and more senior barristers and solicitors
Regulators differed in the clarity and consistency of their post-Mazur advice and guidance, according to an interim report by the Legal Services Board (LSB)
The dangers of uncritical artificial intelligence (AI) use in legal practice are no longer hypothetical. In this week's NLJ, Dr Charanjit Singh of Holborn Chambers examines cases where lawyers relied on ‘hallucinated’ citations — entirely fictitious authorities generated by AI tools
The Solicitors Act 1974 may still underpin legal regulation, but its age is increasingly showing. Writing in NLJ this week, Victoria Morrison-Hughes of the Association of Costs Lawyers argues that the Act is ‘out of step with modern consumer law’ and actively deters fairness
back-to-top-scroll