20 November 2012
First successes in red tape challenge with SRA set to sweep away City irritants
Red tape: SRA rejected need to report trivial rules breaches
The end of the “crazy” requirement that law firms have to go through multiple notification processes to nominate the same people as compliance officers for affiliated entities is in sight as one of the first changes flowing from the Solicitors Regulation Authority’s (SRA) ‘red tape challenge’.
The challenge, set last week by SRA chairman Charles Plant, followed an initial trial with the City of London Law Society, and nine of its 10 recommendations are being put into practice. The list, provided to Legal Futures, largely dealt with minor but irritating administrative issues, and expressly excluded suggestions for amendments to the code of conduct, anything to do with international practice, and points concerning the SRA’s responsiveness.
One of the suggestions accepted was: “Where there is a main UK regulated body (a principal LLP), make it possible for the COLP and the COFA for that organisation automatically to be able to serve as COLP and COFA for any related entities. It is crazy to have to go through multiple notification processes for the same individual in the context of affiliated entities. The main nomination for the COLP should include a section naming other regulated entities for which the COLP accepts similar responsibility.”
Others included permitting authorised signatories and organisational contacts (ORCs) to manage (on behalf of their firms and their firms’ managers) joiners, leavers, admissions and movements across entities, and foreign lawyer and European lawyer registrations; and giving ORCs the ability to correct errors made by the SRA – such as typos or recording status of a manager incorrectly – where the information has been correctly provided by the firm, without requiring, in the case of a name, production of the lawyer’s passport.
Then there was introducing a procedure whereby registered foreign lawyers or other new managers’ start-dates can be corrected subsequently if the date given in advance is not met in fact; and removing the need for approval (or greatly shorten the timeframe for approvals) for trainee secondments to clients or to firms’ overseas offices which are not themselves regulated by SRA, such as seconding people to a firm’s US offices.
The CLLS also called for the mailing lists for consultations and the list of compliance officers to be used used to notify firms every time there is a change to the code of conduct (and associated guidance) and to forms, “rather than forcing firms to have to comb the website and open every form kept there every so often on the off chance there has been a change”.
Perhaps unsurprisingly, the one proposal rejected by the SRA was to remove the need to record and report trivial breaches of the SRA Handbook, including of the accounts rules, for instance where it is a bank error which has been corrected.
Chris Perrin, chairman of the professional rules and regulation committee of the CLLS and general counsel at Clifford Chance, said: “In September, the CLLS organised a meeting for senior members of the SRA and representatives of CLLS firms who are involved in regulatory issues. It was a very informative event. Charles Plant surprised us with his invitation to come up with 10 examples of red tape which made life difficult for law firms, and offered to see if they could be removed.
“We quickly assembled a shortlist from suggestions sent in by CLLS firms. Equally quickly, the SRA confirmed that they would accommodate our request on nine out of the 10. It was an excellent demonstration not only of what the CLLS can achieve for its members, but also of the SRA’s willingness to be helpful. I hope they will be just as receptive when we submit numbers 10 to 20!”
By Neil Rose
Tags: COFA, COLP, compliance officer for finance and administration, compliance officer for legal practice, Solicitors Regulation Authority