One thing’s for certain: lawyers can really get things moving when they want changes to the Financial Services Reform Act (FSRA) legislation. Fears that they may have been forced to obtain an Australian financial services licence (AFSL) for performing quasi-financial practices have seen Parliamentary Secretary to the Treasurer Ross Cameron promising swift action.

The Law Council had approached the Government because it feared that without government intervention insurers could use aspects of the legislation to exclude some legal tasks from their professional indemnity (PI) cover. The Law Council says the FSRA may have impacted on the Corporations Act in such a way that a loophole in the legislation would force lawyers to hold an AFSL.

According to the Australian Financial Review, activities that may have been affected included preparing a draft scheme of arrangement and notice of meeting; preparing a mortgage for a financial product; and attending completion of sale or dealing with purchase agreements concerning financial products such as shares.

Mr Cameron told the Law Council he would soon introduce remedial regulation to address the problem. Law Council Secretary General Michael Lavarch said there’s compelling commercial justification for granting relief and the issue demands quick action because of lawyers’ PI concerns.

“This exclusion may have the impact of removing from cover many activities which have traditionally been within the scope of ordinary legal practice – for instance, drafting share sale agreements,” he said.