The Law Society has received a "fair" response to the consultation paper to simplify the Solicitors' Investment Business rules.
Although the draft rules have few changes of substance, the SIB required the Law Society to consult with the profession and other interested parties, including consumer groups.
The rules, which came into being in 1990, were designed to offer investors "equivalent protection" to the rules of the Securities and Investments Board (SIB) as required by the Financial Services Act 1986.
After the passing of the Companies Act 1989, this "equivalence" text has been replaced by one of "adequacy" so that all regulatory bodies have rules which give adequate protection to investors.
The draft includes a new rule providing that all firms must have a compliance officer who is either a sole solicitor, a partner or a director. This also applies to firms which are not conducting discrete investment business. It says it is a matter of good management for a solicitor to have overall responsibility for ensuring that adequate systems are in place to achieve compliance with the rules.
Another new rule includes the keeping of records relating to commissions while the rule relating to client agreements has been substantially altered. A client agreement is no longer obligatory except for discretionary portfolio management.
A three month implementation period was proposed for the new rules as the Law Society considered that the proposed changes were cost neutral.
Commenting on the responses, Paul Venton, head of the standards and guidance committee, said those he had received supported the clarification of the rules. "They were incredibly difficult to understand and therefore difficult to obey," he said. "We tried to put them in plainer English."