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Exempt professional firm meaning
Published by a LexisNexis Financial Services expert
What does Exempt professional firm mean?
In legal practice, an exempt professional firm is a solicitors’ or other professional practice that can carry on limited, incidental financial services work without FCA authorisation because it belongs to a designated professional body (DPB). The term is defined in the Financial Services and Markets Act 2000 (FSMA), Part XX, and in the FCA Handbook Glossary.
To rely on this status, the firm must be a member of a DPB (for example, the relevant law or accountancy body) and meet the conditions in sections 327–332 FSMA. In broad terms, any regulated activities under the Regulated Activities Order must be ancillary to the firm’s professional services to clients and undertaken within the DPB’s scope and rules. For these activities, oversight sits with the DPB rather than the FCA.
This exemption is typically used by law firms and accountancy firms when advising on or arranging investments connected with a client transaction or matter. Firms must monitor the limits of the exemption, financial promotion restrictions, and any notification or registration requirements.
In England & Wales, Scotland and Northern Ireland the term has this specific statutory meaning. In Ireland, there is no identical statutory label; comparable issues are addressed under MiFID II and Irish regulatory exemptions...
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View the related Practice Notes about Exempt professional firm
PRACTICE NOTES
UK Designated Professional Bodies (DPBs) under FSMA 2000: scope, exemptions for exempt professional firms, prohibited activities, insurance distribution registration, disclosure requirements, and AML/CTF supervision reforms
Scope of this Practice Note This Practice Note explores the function of designated professional bodies (DPBs)—covering solicitors, accountants, actuaries, licensed conveyancers and chartered surveyors—as provided in Part 20 of the Financial Services and Markets Act 2000 (FSMA 2000). DPBs supervise and regulate members of these professions, who are regarded as exempt professional firms (EFPs) under FSMA 2000, s 327. It outlines: the criteria a professional body must meet to be treated as a DPB; the exemptions that apply to members of these professions; and the disclosures such firms must make to the public. What is a Designated Professional Body? A Designated Professional Body is a body that regulates and oversees members of the professions listed above, who are EFPs under FSMA 2000, s 327. An exempt professional firm is a person to whom the general prohibition does not apply. A person must not carry on a regulated activity in the UK, or hold themselves out as doing so, unless authorised...
21 May
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View the related UK Parliament Acts about Exempt professional firm
UK PARLIAMENT ACTS
331 Procedure on making or varying orders under section 329
(1) If the [FCA] proposes to make an order under section 329, it must give the person concerned a warning notice.(2) The warning notice must set out the terms of the proposed order.(3) If the [FCA] decides to make an order under section 329, it must give the person concerned a decision notice.(4) The decision notice must—(a) name the person to whom the order applies;(b) set out the terms of the order; and(c) be given to the person named in the order.(5) Subsections (6) to (8) apply to
UK PARLIAMENT ACTS
325 [FCA's] general duty
325 [FCA's] general duty(1) The [FCA] must keep itself informed about—(a) the way in which designated professional bodies supervise and regulate the carrying on of exempt regulated activities by members of the professions in relation to which they are established;(b) the way in which such members are carrying on exempt regulated activities.(2) In this Part—“exempt regulated activities” means regulated activities which may, as a result of this Part, be carried on by members of a profession which is supervised and regulated by a designated
UK PARLIAMENT ACTS
333 False claims to be a person to whom the general prohibition does not apply
(1) A person who—(a) describes himself (in whatever terms) as a person to whom the general prohibition does not apply, in relation to a particular regulated activity, as a result of this Part, or(b) behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is such a person,is guilty of an offence if he is not such a person.(2) In proceedings for an offence under this section it is a
