The Leader Column

The concern focuses on whether the wording of the FSMA successfully separates transactional legal advice from investment business, leading many to question whether or not – in the usual course of negotiations for clients – they are carrying out investment business. Most argue that they are not, but some are not so sure.
Those who believe they might be, and fear the wrath of the FSA, which is keen to exert its new powers, have opted in. These firms, which include Wragge & Co, Clifford Chance (which originally intended to opt out but had cold feet at the last moment), Pinsent Curtis Biddle and Addleshaw Booth & Co, opted in through the 'grandfathering' method by the 31 October deadline. But while they might have avoided sleepless nights over possible criminal sanctions, they now must comply with the weighty tome that is the FSA handbook. This could mean needing a properly instituted compliance department, with bureaucracy layered on top of that, since the FSA may wish to audit its client books from time to time. It also raises the question of what happens if a firm is acting for a client against the FSA – the very body that regulates it.
Conversely, Slaughter and May, Freshfields Bruckhaus Deringer, Rowe & Maw, Ashurst Morris Crisp, Lovells and Denton Wilde Sapte believe that with further guidance from the Treasury and stringent in-house guidelines, they can stay within the law. These firms, together with the Law Society, continue to badger the Treasury for full-blown legislative reform.
Unfortunately, firms wishing to find the guidance from the FSA, if and when it is produced, might have a few problems getting it.
Even Freshfields, the regulators' own legal adviser, doesn't always know where to find it. The magic circle firm mistakenly sent a confidential email regarding Equitable Life to an address ending in instead of It went to Elaine Findlay, the proprietor of Findlay Steele Associates. Even a regulator can't avoid a domain name dispute.