Around 25-30 would-be alternative business structures (ABSs) have formally completed their applications and are now being considered for licences – with decisions on a few “quite imminent” – the Solicitors Regulation Authority (SRA) has revealed.
A further 130 have submitted their stage two applications, but these have not yet been deemed ‘complete’ because the SRA is seeking further information. In all the SRA has received 230 stage one expressions of interest.
In an interview with Legal Futures to answer the growing chorus of complaints about how the authority is running the application process, executive director Samantha Barrass acknowledged that the SRA needed to close the gap between “expectation and understanding”, and increase transparency.
As a result, it will next week publish revised guidance about making an application. It will also publish any waivers that have so far been granted to ABSs ahead of implementation of a publishing policy for all waivers granted by the SRA.
Other issues that have come to the fore in the first five months of the application process are the extent to which people who are seemingly only tangentially involved in an ABS end up having to pass the suitability test; the “legal and regulatory issues” that some multi-disciplinary practices throw up; and the application of the separate business rule.
Ms Barrass emphatically denied claims that the SRA is using the post-submission period when it is asking questions as a way to buy time. That would be “completely contrary to our ethos as a regulator and totally inappropriate”, she said. She also called on potential applicants to engage with the SRA as early as possible to discuss issues that may arise during the process.
One of the common complaints about the length of time applications are taking is the problems this is causing companies with the financing they have already put in place in anticipation of a licence. But Ms Barrass said she is “unapologetic” about this – it is not a problem of the SRA’s making. “Some applicants have made the mistake of putting in place the financing before talking to us about how long we think the application will take.”
To read the full interview, click here.