The Law Society has published its response to HMT’s consultation on amending the definition of financial advice in Article 53 of RAO. Generally, the Law Society supports the policy objective of appropriate regulatory simplification. Like the CLLS, it is agreed that the definition of the regulated activity should be limited to personal recommendations, and should be matched to the MiFID 2 definition. It thinks the personal recommendation should be a recommendation “on the merits” of buying or selling, etc., as is the case for advice under Article 53 of RAO. Perimeter guidance should encompass all the activities set out in the definition of “personal recommendation” under MiFID, namely to buy, sell, subscribe for, exchange, redeem, hold or underwrite or to exercise or not to exercise any right conferred by a particular financial instrument to do one of those things. The Law Society then sets out other potential areas of regulatory simplification, mainly related to the differences between MiFID and the relevant regulated activities. It gives as examples, the UK’s “by way of business” test as it relates to investments, the scope of the RAO activities of dealing and principal and agent and asks whether the UK really needs to keep a definition of collective investment scheme, given there are definitions of UCITS and AIFs
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