One of our key objectives is to ensure that sole practitioners and small firms are able to comply with our rules in a way that is appropriate for their size. This is not about compromising regulation. It is about identifying ways of making compliance with regulation easier and in a way which allows for innovation. It will enable as diverse a range of firms as possible to get on with doing business while meeting the needs of clients.
Get involved in our "Looking to the future" consultation
Regulation of consumer credit activities, April 2016
After the regulation of consumer credit activities was moved from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA), we committed ourselves to finding the best way forward for law firms and users of legal services. We treated the change as a chance to review how to regulate the many law firms that carry out consumer credit activities.
Talking to small firms and sole practitioners about the changes focused our attention on the complexity of this area of regulation—and showed us that we could do more to help. Earlier this year, we launched a consumer credit toolkit. The toolkit is designed to help firms understand the regulatory requirements and deliver consumer credit services in a compliant way.
Our new rules relating to consumer credit activities came into force on 1 April. By now, all firms should have considered if they are affected by changes to the way consumer credit activities are regulated. Some firms may not be able to rely on our arrangements—and, so, may now need to be authorised by the FCA. If that is not an option for a given firm, it needs to stop carrying out consumer credit activities.
If your firm is delivering consumer credit services—whatever your circumstances—we recommend that you visit our consumer credit toolkit to learn more about the new regulatory approach.
Previous regulatory updates
How does the SRA define a 'small firm'?
Our view is that a small firm can be best defined as a sole practitioner or a firm with no more than four partners, members or directors, which has an annual turnover of no more than £400,000. We do not feel it is necessary include any limit on the number of PC holders, as in practice turnover operates as the appropriate restriction.
Use www.sra.org.uk/smallfirms to link to this page.