SRA's application to be ABS regulator approved

The Solicitors Regulation Authority has welcomed the Legal Services Board's decision to approve its new handbook and back its application to become a licensed regulator for alternative business structures.

The new handbook, available in draft since April, sets out the regulator's new principles-based approach and outcomes-focused regulation.

OFR has been seen as key to effective regulation in a post-Legal Services Act world which will allow non-lawyers to enter the market.

The principles-based approach which underpins it has been designed to be entity-neutral, applying equally to traditional law firms and alternative business structures.

The LSB's decision, made at its board meeting on 13 June, will allow the SRA to roll out its plan to become an ABS regulator come 6 October.

Under the Act the Law Society has remained the approved regulator but regulatory functions have been devolved to the SRA, which prepared both the application and the new licensing rules and will be the regulator for ABSs.

Final approval will only takes place after a change to the Legal Services Act and the super-regulator will now make a recommendation to the Lord Chancellor under the Act that the Law Society should be designated as a licensing authority. If an order is made by the Lord Chancellor designating the Law Society as a licensing authority, the SRA's licensing rules will at the same time be treated as having been approved by the board.

'We are delighted to win the LSB's approval for the licensing authority application, which will now go forward for parliamentary approval,' SRA chief executive Antony Townsend said. 'We believe that it is in the public interest for us to regulate ABS, as this allows us to ensure that these new business are subject to the same rigorous professional standards as those expected of traditional law firms.'