SRA Consumer credit toolkit helps firms with compliance

A consumer credit toolkit adopting a new approach for law firm regulation so that the majority of practices should not have to be regulated by both SRA and the Financial Conduct Authority (FCA).

The new approach, which comes into effect on 1 April 2016, allows SRA to carry out consumer credit regulation for firms if their work is an integral part of the legal services being provided.

Some firms might still need to be regulated by the FCA, so all practices need to check if they need to apply for dual regulation.

The SRA Consumer Credit toolkit

SRA Consumer credit regulation to be approved 1 April 2016

Crispin Passmore, SRA Executive Director for Policy, said: “We have worked hard with the FCA to produce proposals that offer a balanced and proportionate approach to regulation. These proposals are good news for firms and their clients alike and continue our ongoing work of simplifying and streamlining our regulatory approach.

“We hope the LSB agrees with that view and approves the changes.”

If the LSB agrees, the relevant changes to the SRA Handbook will come into effect on 1 April 2016.

SRA introduces changes to help businesses thrive

Changes that will make it easier for law firms to do business are included in the latest version of the SRA Handbook, which was published on 1 November.

We are committed to reforming its rules and regulations, removing any deemed unnecessary that do not protect the interests of clients. In doing so, we are playing our part in freeing up law firms to get on with the business of delivering quality legal services. Changes in the latest version of the Handbook include:

  • Amendments to the Separate Business Rule that enable solicitors to offer other professional services;
  • Removing the need for the compliance officers of small firms to apply to be licensed by us;
  • Streamlining a number of processes for law firms applying to be licensed as alternative business structures, such as the need for us to approve individual managers; and
  • Expanding the exemption for firms to obtain an accountant’s report

Paul Philip, Chief Executive, said: “These changes are part of our commitment to reforming our regulatory model, encouraging growth in the sector, and ensuring our approach is proportionate. We have also taken another step towards opening up routes into the profession by allowing qualification through the apprenticeship route.

“A large number of the changes we have made have come from suggestions made by those in the profession. We will always look at ideas brought to us and carry them through if we believe they have merit, as these latest amendments show.”

Other major changes in Version 15 of the Handbook include harmonising the way sole practitioners are authorised, bringing them into line with all other firms, and removing the need for those taking the Qualified Lawyers Transfer Scheme to obtain a certificate of eligibility. The Handbook can be found here

Go to the Handbook

SRA Handbook Version 15 changes 1 Nov 2015

1 November 2015

The fifteenth version of the Handbook was published on 1 November 2015, and all the changes in this version came into effect on that date. The changes are outlined in these notes: please refer to the Handbook itself for full details.

The main changes are to SRA Accounts Rules, Sole Practitioners Authorisation and Consumer Credit Activities extension of the transitional period which will now run until 31 March 2016.

Changes to SRA Handbook Release 15 1 Nov 2015

SRA Exemption from Accountant’s Report

Following approval by the Legal Services Board, from 1 November 2015, some firms will be exempt from the requirement to obtain an accountant’s report.

The exemption will apply where during the accounting period the average balance on client account does not exceed £10,000 and the maximum in each balance does not exceed £250,000.

Exemption Criteria

SRA Guidance Accountants Report

Crispin Passmore, SRA Executive Director for Policy, said: “This is the second phase of a project aimed at making our regulation more proportionate and targeted. The changes continue our work to remove the obligation for firms deemed low risk to go through the reporting process.

“For those firms that still have the obligation to obtain a report, the changes strengthen the reports by giving accountants more scope to advise firms on how they handle client money. That will help clients and build confidence in law firms. We’ve published the guidance to help firms and their accountants get the most out of the changes we’ve made.”

SRA Guidance

A Question of Trust from SRA

Paul Philip (SRA CEO) describes the ‘Question of Trust’ (QoT) campaign as about finding the “right balance” when making regulatory decisions, framed as part of a wider programme of reform on the theme of professionalism.

Stephen Vaughan, Senior Lecturer in Law at University of Birmingham, has some interesting comments.

A question of Trust reflections

SRA tells solicitors: explain your separate business set-up

Firms will also be allowed to refer cases to the separate business with which they are attached, but only if it is in the client’s best interests.

The client’s consent to waving their confidentiality ‘must be clear and they cannot be forced to do so’, the guidance states. This request to waive confidentiality must be clear and separate to any other terms.

Law Gazette

Proposals for consumer credit regulation adopted by SRA Board

The SRA Board approved on 9th September 2015 that there is no need for solicitors to be regulated by the Financial Conduct Authority (FCA) and are not over-burdened with significant additional rules for consumer credit, and that their client protections remain in place.

SRA Consumer Credit


SRA Sole Practitioners Authorisation and PC renewals

From the renewal of your practising Certificate you will no longer require endorsement each year by the SRA.

From 1 November 2015 the Code of Conduct will be amended to reflect the change.

Sole practitioner authorisation

Renewals of Practising Certificates