What the authorisation process looks like and what you can expect
7 March 2011
Introduction
Applications will be commenced online. In order to do this, you will need to nominate a contact individual. The contact individual will need access to all the information in order to be in a position to complete the form.
Please note that, although the contact individual will be completing the form, the entity that is applying for authorisation and/or those who are setting up the firm will be responsible for the application and must ensure that it is accurate and that the details are true and comprehensive.
Once you have submitted an application for authorisation, we may need to contact you to discuss aspects of your application or issues relating to the approval of shareholders, managers or the compliance officer for legal practice (COLP) and the compliance officer for finance and administration (COFA). Please supply us with any additional information as quickly as possible.
We intend to process most applications well within the statutory standards which are set out in the Legal Services Act. We will try to meet any relevant dates you tell us about, but it would help us if you make your application in plenty of time. We will make a decision within
- six months of receiving your complete application, or
- nine months if we require an extension, which we are required to tell you about in writing.
If we consider it necessary, in order to mitigate any risks that we have identified, we may impose conditions on your licence, with which you must comply.
Application of the SRA Handbook in relation to "owners"
We recognise and welcome innovative and dynamic structures that will become a part of the legal services market. Our rules have been drafted to ensure applications from all firm types can be considered including partnerships, PLCs, limited companies, limited liability partnerships, etc.
All firms applying to become an ABS are required to provide details of their shareholders including those who hold a material interest by association. We recognise that there may be challenges in identifying all associates for certain types of business model—for example, initial public offerings, public limited companies, private equity investment funds. Our approach for such applicants will be that we will seek to work closely with the applicant body to determine the individual challenges they may face in complying with this part of our Handbook and to what extent they can reasonably have knowledge of this information.
Applications for waivers
We are committed to ensuring that our regulatory regime does not impose unnecessary restrictions on prospective ABS applicants. We recognise that there may be circumstances in which a waiver of our rules is appropriate, and, with this in mind, we plan to publish a policy statement to clarify the position on applying for a waiver. For example, in the case of the separate business requirements, we recognise that there may be circumstances where the additional consumer protection provided in chapter 12 of the SRA Code of Conduct is not necessary. In these circumstances, we may be minded to consider an application for a waiver of the separate business requirements. An example application might be from a large professional services firm wanting to offer, through a separate business, services which are regulated by another competent regulator or professional body (e.g. accountancy firms).
We welcome discussions with prospective ABS applicants to consider their circumstances and strongly recommend contacting the Authorisation Team using the contact details below. We recommend prospective applications review the policy statement on general waivers and separate business requirements.
Risk assessment
All information supplied as part of the authorisation process will be used to risk assess applicant firms. This risk assessment will enable the SRA to determine
- whether or not a firm should be authorised,
- if it is to be authorised, how the firm should be supervised in the future. For further information on our approach to supervision, please see our November Policy Statement.
Approval by other regulators and non-legal activities
Your firm may already be authorised by other regulatory bodies such as the Financial Services Authority. If so, you will need to provide details of your authorisation and regulatory history as part of your application for authorisation. We may need to contact other regulatory bodies.
If you are starting up a new firm and intend that the firm be authorised by other regulators, you should also provide details.
In either case, you will need to consider how your other activities relate to the legal services that you intend to provide and how you will ensure that clients are fully informed about the nature of the services you are offering and the extent to which they are protected by professional indemnity insurance and compensation arrangements.
Who you can contact
If you have any questions about the ABS authorisation process, please contact us.