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UK firms required to nominate compliance officers by 31 July 2012

20 April 2012

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By Manju Manglani, Editor (@ManjuManglani)

UK law firms will be required to nominate compliance officers between 31 May and 31 July 2012, Samantha Barrass, executive director of the Solicitors Regulation Authority (SRA), said at a Managing Partner conference.

Firms will be expected to complete a short online nomination form based on binding declarations by both a senior manager and the nominated compliance officer for legal practice (COLP) and compliance officer for financial administration (COFA).

Alongside declarations relating to the suitability test, the form will include confirmation that the firm has systems in place that allow compliance officers to perform their duties and that the nominees have sufficient seniority and responsibility in the firm.

The SRA has stressed that while COLPs and COFAs are the formal focus points for compliance, they will not be seen as “sacrificial lambs”: senior managers will still be held to account. The regulator has that noted its intention is to create a firmwide culture of compliance.

Barrass said: “While the vast majority of firms place a great deal of importance on professional ethics and delivery of profession services, others may not have adequately assessed their risks, and how those risks affect their achievement of the regulatory outcomes.

“What this tells us is that a proactive, efficient regulatory regime is one where the primary responsibility for managing compliance risk lies with the firms, with particular responsibilities for the most senior people in firms. It encourages the development of a strong proactive compliance culture in firms by creating a clear formal focus for delivery of the regulatory outcomes in each firm, increasing the chances that the vast majority of firms will identify and deal with regulatory risk.”

She added that the SRA is currently considering ways of accommodating late approvals of compliance officers but that it “expect[s] to confirm most COLPS and COFAs by the end of October, consistent with the overall timetable”.

The nomination process had been scheduled to start on 31 March but was delayed due to the practising certificate renewals starting later than intended. The SRA said the delay has given it time to reflect on its approach to the COLP and COFA nomination system and to ensure firms do not experience difficulties with the approval process.

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Risk & Compliance