Authorisation of financial services start-up and owner's employment issues

sean.r

Dear all,

I am seeking to establish a firm in the financial services sector. I have two legal issues: one relates to my current employment contract, which may limit my involvement in the proposed firm. The second is that the proposed business does not fit neatly into any of the categories used by the Central Bank of Ireland (CBI) for regulatory purposes, so I may need legal advice on this.

On the employment aspect, my current employer requires the disclosure of any material personal investment, as well as any directorships or other outside business involvement. This is to prevent conflict of interest. There is no conflict of interest with my proposed business, but I would rather not disclose my idea to my current employer as my employer would probably question my commitment to the job. I would like to be the majority equity owner in the business, perhaps through a proxy (if permissible), but I’m afraid any such arrangement might be frowned upon when the firm seeks authorisation from the CBI (if authorisation is necessary). So the employment and financial services legal issues are intertwined.

On the authorisation/regulatory aspects, the service proposed might be considered a Collective Investment Scheme, an Alternative Investment Fund, or something else. There may also be the possibility to adjust the terms of the service so that it falls outside a certain category if the regulatory burden is particularly onerous for a given category.

It is probably too early to approach the CBI, since I am not sure to what degree I can be involved in the business, and my lack of legal knowledge on the regulatory aspects could count against the business when it seeks authorisation (if necessary). So it looks like I need to incur costs at this point.

I was wondering if advice on the employment and regulatory aspects could be provided by a single law firm, or if a specialist would be preferable for the financial services aspects. I would greatly appreciate any thoughts on the possible cost of such advice, on particular firms that may be suitable, or on the likely feasibility of my involvement in the business.

Apologies for the very particular subject matter and I hope it is not unsuitable for this forum.

Many thanks in advance

Sean

Pat Mustard

sean.r wrote: »

I was wondering if advice on the employment and regulatory aspects could be provided by a single law firm, or if a specialist would be preferable for the financial services aspects. I would greatly appreciate any thoughts on the possible cost of such advice, on particular firms that may be suitable, or on the likely feasibility of my involvement in the business.

You need advice on your current employment contract and you also need advice on regulatory issues in relation to the proposed firm.

Regarding the regulatory issues, I think that you may need specialist advice from a funds lawyer (solicitor specializing in funds).

I am a bit confused when you say that your current employer might frown on you setting up a new firm and might question your commitment to your job. I am unsure if you plan to stay in your current job and set up this new firm, or if you plan to set up the new firm and jump ship, if the expression may be excused.

In any event, assuming that you have a funds lawyer for regulatory issues, you could see what he or she might suggest regarding taking advice on the employment aspect. It could be that it might be most appropriate for the funds lawyer to organise a consultation with a barrister who specializes in employment law, or it could be that the funds lawyer might refer you to a solicitor who specializes in the area, so that they could cooperate on the linked issues that you described.

The bigger firms will certainly have solicitors who deal with both areas of law described by you.

I might point out that we can't give recommendations for lawyers on this forum.

sean.r

Many thanks The Mustard. To clarify, I would like to continue my current employment.

Seeking a funds lawyer first does sound like the best approach. I will request a cost estimate from a few such firms and take it from there.

thanks again!

Pat Mustard

Two things:

1. You could take a look at your employment contract, in preparation for taking advice on employment issues.

2. You may wish to redact the information given in this thread, if there is confidential information.