Keystone Law Limited is registered as an "Exempt Professional Firm" (EPF) on the FCA register with the reference number LS 400999. This entitles the firm in England to conduct what is known as "regulated financial services activities" and "insurance distribution". Our nominated Insurance Distribution Officer, is the General Counsel.
We are subject to the SRA Financial Services (Scope) Rules and the SRA Financial Services (Conduct of Business) Rules.
While we are somewhat limited by the rules set out below, there is much we can do for clients in relation to advising on the terms of policies and contacting brokers to arrange a policy. Insurance is specialist work, so if you have a client with an insurance need you should first speak to a specialist insurance colleague who will know these rules well and will know what we can and cannot do.
The Scope Rules - what we may and may not do
The Rules (at r.3.1) state that we may provide financial and investment-related advice only if it is, or could reasonably be regarded as being, a necessary or related part of the legal services that we provide to our clients. This includes advice to transfer shares as part of a company restructuring or the amount to offer an opponent if seeking to settle litigation.
We may not provide advice on the merits of investment transactions as we are not permitted to engage in any investment transaction or other investment activity. In particular, we are not entitled to communicate invitations or inducements to engage in investment activity on any client's behalf.
You should note in particular the SRA warning note on investments. It specifically warns against taking part in any investment transactions where the purchase price of the investment is to be used to purchase/build the investment asset. For example, hotels, care homes, storage facilities, especially where the ownership will be fractional - i.e. a client will be able to buy a room or a unit that will (hopefully) yield an investment income. This is referred to as "buyer-led finance". This is also expressly prohibited in the Scope Rules. If you are unsure if your instruction might be caught by the rules, you should contact the General Counsel before acting.
The Conduct of Business Rules
These are more procedural. You must ensure you are contracting with the client under our latest Terms of Engagement . We use those to meet the requirements in the COB Rules, which are often updated.
Penalty for breach
Breaching the SRA Financial Services (Scope) Rules and the SRA Financial Services (Conduct of Business) Rules is both an SRA breach and a criminal offence.