COLPs and COFAs: issues with 1,200 nominees

The SRA have revealed that 1,200 nominees did not declare “potentially relevant issues” — including undisclosed criminal convictions, serious disciplinary sanctions and undeclared bankruptcy.

A total of 145 firms are facing enforcement action for failing to complete nominations for the positions.

A substantial minority of these have also not begun their practicing certificate renewals, and they are being prioritised for further investigation.

9,751 firms have completed the nominations process so far with 9,244 firms having been approved.

The SRA said there were various reasons why 507 firms have completed the process but not yet been approved, including declarations that have required further investigation, those who have failed to disclose suitability issues subsequently identified by the SRA and nominations that were made late.

The SRA board are meeting this week to discuss the risk of firms choosing to abandon SRA processes, and were planning for the potential impact of this and the interventions that would have to follow.

SRA executive director Samantha Barrass said: “In general, our strategy to achieve compliance by engaging with firms to actively seek alternative nominations, encourage completion of nominations and investigate issues that have been identified, has paid dividends.

“However, we are now at the stage where there are only a small proportion of outstanding approvals to be made and our focus will switch to proportionate enforcement action against those firms that have refused to nominate or otherwise failed to engage appropriately with the process.”

She said this will range from letters of advice, fines, rebukes, through to revocation of authorisation, and referral to the Solicitors Disciplinary Tribunal.

The SRA said that the number of unsuitable individuals was far higher than they expected.

So what does this mean for the industry? With so many firms forgetting to make relevant declarations about the suitability of their COLPS and COFAS, is there a risk in greater levels of mistrust from lenders?

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