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New restrictions set to impact legal profession

New restrictions set to impact legal profession

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The Legal Services Council has called for an inquiry into new managed investment scheme restrictions, which are set to come into effect next year.

The LSC has called for financial services law expert Professor Pamela Hanrahan from UNSW to inquire into the “likely impact of changes to the Legal Profession Uniform Law”, which are “due to impact the profession from 1 July 2018”.

According to the LSC, the changes will prohibit law practices and their related entities from engaging in a range of activities, including promoting or operating arrangements and structures that come within the broad statutory definition of a managed investment scheme.

“The changes are contained in Section 258 of the Uniform Law. They were enacted in 2014 but their commencement was deferred until 1 July 2018,” Professor Hanrahan said.

“Some firms may not have them on their radar, or think they are only relevant to solicitors who conduct mortgage businesses, but this is not the case.

“Nor is it just about managed investment schemes that must be registered with ASIC under the Corporations Act.”

Professor Hanrahan noted that the new rules have the potential to change some internal firm structures, and may impact on some multidisciplinary practices that include a financial services component.

In addition, the professor noted that there will be new restrictions on providing legal services in certain circumstances, including where lawyers or staff have investments in a scheme.

The inquiry, led by Professor Hanrahan, will report to the LSC by 30 September 2017, with recommendations on new rules to be made under the section.

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