[1]Barrass: proportionate enforcement action
The Solicitors Regulation Authority (SRA) is to begin the process of pursuing the 400 law firms which have yet to nominate their compliance officers after the first tranche of approvals was issued.
Notifications of approval of compliance officers for legal practice and for finance and administration (COLP/COFA) will continue to be sent out by e-mail in the coming weeks to the individuals involved and each firm’s authorised signatory.
Those firms selected at random to test the robustness of the SRA’s self-declaration system and some 700 firms identified by the SRA’s risk model as requiring further inquiries are subject to further scrutiny. Decisions on these nominations are expected before the end of December.
The SRA said it is also engaging with firms and their nominees where “significant suitability issues” have been disclosed or are arising, or where those nominated are not regulated by the SRA and hence the SRA needs to undertake further background checks.
SRA executive director Samantha Barrass said: “That we’re now in a position to authorise the first round of compliance officers marks a huge step in the process. However, we are disappointed that, despite repeated requests, some firms have still not nominated nearly four months after the final deadline.
“While we will have to undertake proportionate enforcement action in these cases, our principal aim is to ensure that as many firms as possible have approved COLPs and COFAs in place by the end of the year.
“The first part of this action will involve an ‘explanation with warning’ letter, which will be sent to the firms that have not yet adequately explained why there is no record of their completed nomination. We very much hope that this process will bring down the numbers of outstanding nominations.”
COLPs and COFAs will take up their duties from 1 January 2013. All compliance officers need to be approved by 31 December and any firm that does not have individuals in place and approved by the SRA will be in breach of the regulations. Likely regulatory sanctions could range from reprimands and fines through to the revocation of a firm’s licence or recognition.
In outspoken comments [2] last month, SRA chairman Charles Plant cited the failures to nominate compliance officers as evidence of his belief that there are too many solicitors in England and Wales “who are simply not good enough”.