SRA Handbook

Prohibited activities

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Rule 3: Prohibited activities

3.1

A firm must not carry on, or agree to carry on, any of the following activities:

(a)

market making in investments;

(b)

buying, selling, subscribing for or underwriting investments as principal where the firm:

(i)

holds itself out as engaging in the business of buying such investments with a view to selling them;

(ii)

holds itself out as engaging in the business of underwriting investments of the kind to which the transaction relates; or

(iii)

regularly solicits members of the public with the purpose of inducing them, as principals or agents, to enter into transactions and the transaction is entered into as a result of the firm having solicited members of the public in that manner.

(c)

buying or selling investments with a view to stabilising or maintaining the market price of the investments;

(d)

acting as a stakeholder pension scheme manager;

(e)

entering into a broker funds arrangement;

(f)

effecting and carrying out contracts of insurance as principal;

(g)

establishing, operating or winding up a collective investment scheme;

(h)

establishing, operating or winding up a stakeholder pension scheme or a personal pension scheme;

(i)

managing the underwriting capacity of a Lloyds syndicate as a managing agent at Lloyds;

(j)

advising a person to become a member of a particular Lloyd's syndicate;

(k)

entering as provider into a funeral plan contract;

(l)

entering into a regulated mortgage contract as lender or administering a regulated mortgage contract (unless this is in the firm's capacity as a trustee or personal representative and the borrower is a beneficiary under the trust, will or intestacy);

(m)

entering into a regulated home purchase plan as provider or administering a regulated home purchase plan (unless this is in the firm's capacity as a trustee or personal representative and the home purchaser is a beneficiary under the trust, will or intestacy);

(n)

entering into a regulated home reversion plan as a provider or administering a regulated home reversion plan (unless this is in the firm's capacity as a trustee or personal representative and the reversion seller is a beneficiary under the trust, will or intestacy); or

(o)

entering into a regulated sale and rent back agreement as an agreement provider or administering a regulated sale and rent back agreement (unless this is in the firm's capacity as a trustee or personal representative and the agreement seller is a beneficiary under the trust, will or intestacy).

Note

(i)

The Treasury has made the Financial Services and Markets Act 2000 (Professions) (Non-Exempt Activities) Order 2001 which sets out those activities which cannot be provided by professional firms under the Part XX exemption. These activities are also restricted in Rules 3 and 5 of the SRA Financial Services (Scope) Rules 2001.