SRA planning major regulatory reforms
The SRA has announced plans for major programme of regulatory reform, which could see insurers need a financial strength rating.
In a move to better the regulation of solicitors and firms, the SRA is consulting on four major areas to implement change in.
The first is to enable more multi-disciplinary ABS’s to enter the market and ensure their regulation is targeted and proportionate.
The second consultation will focus on changes to the arrangements for compulsory PII for regulated entities so that the minimum requirements set for firms are proportionate whilst still maintaining protection for the public.
The third area the SRA will consult on surrounds changes to compensation arrangements so they are targeted at consumers requiring protection, whilst making sure the overall cost is proportionate and affordable.
The final consultation will be held regarding the requirements for accountants reports on client accounts to reduce the cost of the current arrangements whilst maintaining proportionate safeguards over client money.
The Authority says the programme aims to remove ‘unnecessary regulatory barriers and restrictions’ while also reducing the unecessary regulatory ‘burdens and costs’ on regulated firms by making it pproperly targeted and proportionate.
The SRA has also announced its decision to require insurers participating in the solicitors PII market to have a financial strength rating, however the Authority has decided not to implement this change yet, and instead keep it under review.
The SRA is also considering changes to the separate business rule to provide greater freedom to all regulated firms about how they structure their businesses whilst maintaining appropriate levels of consumer protection.
Further reforms are also being developed and these will be progressed alongside existing programmes of change such as the planned fundamental revisions to the systems for educating, training and developing solicitors through the Training for Tomorrow programme.
SRA Chair of the Board Charles Plant said: “We are determined to regulate in a way which maintains the core professional principles and which enables good, committed, lawyers and firms to meet the diverse legal needs of an increasing number of consumers.
"I believe this programme will deliver a system that achieves our fundamental purpose of protecting consumers and supporting the proper administration of justice, and do so in a more proportionate and targeted way. In the process we will remove unnecessary regulatory barriers and burdens.
"This will be consistent with and support the government£¹s challenge to all legal services regulators to, ‘reduce regulatory burdens on practitioners in the legal sector, and promote innovation, competition and growth in the legal services market’.”
The policy statement, Approach to Regulation and its Reform, and a full policy statement on a minimum rating for participation, as well as the consultation papers are said to be becoming available in ‘due course’ on the SRA’s website, www.sra.org.uk