Compliance Officer changes: what we know and how your firm should respond

Changes to the SRA’s rules on who can act as a firm’s COLP or COFA are due to come into effect in 2027 and will require some firms to reconsider their existing compliance and governance arrangements.

This webinar will explain the new restrictions, which firms are likely to be affected and the steps firms should be considering now. It will look at the new requirement relating to managers or owners who can “unilaterally determine or direct significant management decisions”, the relevant financial thresholds and exemptions, and the implementation timetable. It will also consider the practical options available to firms and how to document a proportionate and defensible approach while further guidance develops.

The changes follow the Legal Services Board’s approval on 31 July 2026 of new rules 8.4 to 8.7 of the SRA Authorisation of Firms Rules. Where a firm’s turnover exceeded £600,000, or its client money exceeded £2 million, in its most recently completed accounting period, a manager or owner with authority to “unilaterally determine or direct significant management decisions” can no longer act as its COLP or COFA.

The Law Society is due to debate the issue at its AGM on 14 October 2026, while the SRA has indicated that further guidance and case studies will be published during the autumn.

Topics covered include:

• The new Rule 8 requirements – understanding the amended rules, which firms are in scope, the relevant exemptions and the implementation timetable.
• The rationale behind the changes – considering the reasoning given by the SRA and Legal Services Board and the potential impact of separating compliance and management responsibilities.
• “Unilaterally determine or direct significant management decisions” – understanding the meaning of the new requirement and considering how it may apply to a firm’s constitution, governance arrangements and day-to-day decision-making.
• Assessing your firm’s position – considering the financial thresholds and assessing whether existing COLP or COFA arrangements may be affected.
• Planning for change – considering when action may be required, including the process and timing involved in appointing a new compliance officer and obtaining SRA approval where necessary.
• Options for firms – examining the possible approaches available, including changes to decision-making structures, shared decision-making arrangements, management boards, reallocation of the COLP and COFA roles and, where relevant, ceasing to hold client money.
• Governance and documentation – considering how firms can document their approach and demonstrate that their arrangements are appropriate, proportionate and defensible.
• Preparing for further guidance – understanding what remains uncertain and how firms can prepare while further SRA guidance and case studies develop.