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SRA approves 5,000 COLP and COFA nominations

Some 700 firms will be subject to further inquiries and scrutiny 

3 December 2012

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The Solicitors Regulation Authority (SRA) has issued its first tranche of approvals for the positions of compliance officer for legal practice (COLP) and compliance officer for finance and administration (COFA).

The first tranche consists of about 5,000 firms of different sizes and types across England and Wales. The SRA will be notifying a further 6,000 or so practices of the suitability of their nominated COLPs and COFAs by 31 December 2012.

Some 700 firms have been identified by the SRA’s risk model as requiring further inquiries. An undisclosed number of firms have also been selected at random to test the robustness of the SRA’s self-declaration system. Both groups of firms will be subject to further scrutiny, with decisions on their nominations expected before the end of December.

The SRA has said that it is also engaging with firms and their nominees where significant suitability issues have been disclosed or are arising in relation to its decision-making criteria, or where those nominated are not regulated by the SRA and therefore require further background checks.

COLPs and COFAs are expected to take up their duties on 1 January 2013. Any firm that does not have individuals in place and approved by the SRA at that time will be in breach of regulations. Likely regulatory sanctions could range from reprimands and fines through to the revocation of the firm’s licence or recognition.

The news comes as the SRA continues to pursue around 400 firms that have failed to notify it of their preferred COLPs and COFAs.

“We are disappointed that, despite repeated requests, some firms have still not nominated [compliance officers] nearly four months after the final deadline,” said Samantha Barrass, executive director at the SRA, noting that the regulator will undertake ‘proportionate’ enforcement action in those cases.

“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.”

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Risk & Compliance