New laws set for lawyers operating on managed investment schemes
The Legal Services Council has revealed that laws have been amended for legal practitioners promoting or operating managed investment schemes in NSW and Victoria.
Effective 1 July, s258 of the Legal Profession Uniform Law has restricted the involvement of law practices in the promotion and operation of MIS, except as exempted by s258(1A) and as specified in the Legal Profession General Uniform Rules. The new laws also affect the provision of legal services in connection with mortgage practices, the council said.
MIS are described as collective investments which include solicitors’ mortgages and arrangements such as property syndicates or investment pools.
“In considering this law reform, the LSC was concerned to achieve a balance between the business needs of law practices and the protection of clients,” said CEO Legal Services Council and commissioner for Uniform Legal Services Regulation, Megan Pitt.
“Section 258 was enacted in 2014 but suspended until 1 July 2018 to allow time for law practices to change their business structures to become compliant with the proposed prohibition. The amendment of s258 and the introduction of General Uniform Rules on MIS have been the culmination of expert advice, industry feedback and regulators’ experience.”
The LSC noted that it will review the effectiveness and regulatory impact of the MIS Rules after 12 months’ operation.