CELE SQE

CELE SQE1 模拟练习

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John instructs his solicitor, Mrs. Smith, to act for him in the purchase of the entire issued share capital of a private limited company from another corporation. Mrs. Smith advises John on the share purchase and helps to prepare and negotiate all the necessary documentation. Neither Mrs. Smith nor her firm is authorised by the Financial Conduct Authority (FCA) to carry on a ‘regulated activity’ as defined in the Financial Services and Markets Act 2000 and related secondary legislation.

Has Mrs. Smith breached the general prohibition against carrying on a regulated activity?

A. Yes, because the solicitor has given advice on the purchase of shares in a specific company and no exclusion or exemption applies.

B. Yes, because the transaction involves the purchase of the entire issued share capital of the company and no exclusion or exemption applies.

C. No, because an exemption applies to professional firms which are supervised by the Solicitors Regulation Authority when they engage in corporate work.

D. No, because an exclusion applies if the transaction relates to the purchase of any number of shares in a private limited company.

E. No, because an exclusion applies if the transaction involves at least 50% of the voting shares in the company.

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Under the Financial Services and Markets Act 2000 (FSMA) and its secondary legislation, certain exclusions and exemptions apply to professional firms conducting corporate transactions. One of these exclusions is that the general prohibition against carrying on a regulated activity does not apply if the transaction involves the purchase of at least 50% of the voting shares in a company. In this scenario, since Mrs. Smith is advising on the purchase of the entire issued share capital of a private limited company, this exclusion applies. Thus, Mrs. Smith has not breached the general prohibition as defined by the FSMA.

Key Point: This question highlights the intersection of corporate law and financial regulation. It is crucial to understand the exclusions and exemptions provided under the FSMA for professional firms engaged in corporate transactions, particularly when these transactions involve significant ownership stakes in a company.

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Business Law & PracticeUnit 3Chapter 7.2

C为什么不对

To specifically address your question:

Under the Financial Services and Markets Act 2000 (FSMA) and its related secondary legislation, there are indeed certain exclusions and exemptions for professional firms engaging in corporate transactions. The key exclusion relevant to this scenario is that the general prohibition on carrying out a regulated activity does not apply when the transaction involves the purchase of at least 50% of the voting shares in a company.

In John’s case, he is purchasing the entire issued share capital of the private limited company, which clearly satisfies the condition of purchasing more than 50% of the voting shares. Therefore, according to the FSMA, this exclusion applies to Mrs. Smith’s situation. She is advising on a transaction that falls under this specific exclusion, meaning she is not breaching the general prohibition against carrying out a regulated activity without FCA authorisation.

In summary, Mrs. Smith has not breached the general prohibition because the transaction is covered by the exclusion involving the purchase of a significant ownership stake (in this case, 100% of the shares) in the company.

I hope this clarification helps to understand why option C is not correct in your original answer. If you have any more questions or need further assistance, please feel free to ask. Keep up the good work!

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