Date issued: 7 July 2017
The Legal Services Council has engaged Professor Pamela Hanrahan, an expert in financial services law and regulation, to inquire into the restrictions on lawyers' involvement with managed investment schemes (MIS) under the Uniform Law, which will come into effect from July 2018.
Section 258 of the Legal Profession Uniform Law will prohibit law practices from promoting or operating a MIS in NSW and Victoria from 1 July 2018 The prohibition will extend to MIS that are registered under Chapter 5C of the Corporations Act 2001 (Cth) and those operating under the current Australian Securities and Investments Commission (ASIC) Class Order [CO 02/238] , which waives the requirement to register for mortgage schemes operated under the supervision of an industry bodies like the Law Institute of Victoria and Law Society of New South Wales.
Further, law practices in participating jurisdictions will not be able to provide legal services to a MIS if any associate of the practice has an interest in the scheme or the responsible entity for the scheme, except as permitted by the Uniform Rules or as approved by the Designated Local Regulatory Authorities [s258(3)]. There are also new restrictions on law practices acting in respect of private mortgages where the loan has been arranged by the practice. The objective of the LSC's Inquiry is to examine the regulatory effects of the Uniform Law prohibition and to investigate policy options, including alternatives to the blanket ban. View the Terms of Reference here.
Professor Hanrahan will work closely with the Council, DLRAs and other stakeholders to inform her report by 30 September 2017. If you would like to make a submission, please email to: email@example.com by Friday 4 August 2017.
Professor Hanrahan has extensive and unique academic and regulatory experience in MIS. In addition to her academic career at the UNSW Business School and, previously, the Melbourne Law School, she has over 15 years' experience as a lawyer in private practice and four years as a senior regulator in Australian Commonwealth and State Government agencies. In 2016, she was appointed by the Australian Government to an Expert Group that will support a taskforce assigned to investigate the enforcement powers available to ASIC.
MIS Inquiry – Terms of Reference