News releases

Agreement allows more information sharing

Regulators from across the legal, accountancy, financial and property sectors have signed a formal agreement that will allow even greater sharing of information.

The Memorandum of Understanding (MOU) was completed yesterday (2 May) and involves the regulatory community agreeing to co-operate through the sharing of information where it is in the public interest to do so. The MOU has been prompted by the recent liberalisation of the legal services market and in particular the launch of alternative business structures (ABSs), firms that can operate under several regulators at once.

Discussions on the memorandum have been complex and detailed to ensure it acts properly as a framework against which individual regulators can work on substantive issues such as consumer engagement, evidence gathering and commons standards and definitions. This will be useful for example in the event of a regulatory breach within a multi-disciplinary practice (MDP).

The MoU will also be useful where there is a synergy between two codes of conduct as this could lead to the MDP having to deal with only one regulator. The signing is particularly timely as the first ABSs are now being licensed by the SRA.

David Hackett, SRA Regulatory Policy Manager, said: "Enhanced cooperation will help to deliver coherence to new organisations and avoid both regulatory conflict and gaps. We want a regulatory framework that avoids duplication and is transparent to the public on how issues are dealt with.

"The memorandum means we will be able to agree standard definitions on rules wherever practical, to help reduce inconsistent or duplicate regulation and thus reduce the cost of compliance. While different rules must necessarily apply across different professions, a common understanding of the cross over and the gaps between these is in everyone's interests."

Simon Blandy, CLC Director of Policy and Standards, added: "The legal services market is going through a period of enormous development and change and this MOU ensures that we as regulators are able to meet the challenges presented by these developments. Consumer protection is at the heart of regulation and it is vital that we regularly review working practices to ensure that we are all working together.

"This increased cooperation will see the regulated community benefit from a reduction in duplicated regulation and will increase the standard of protection for consumers.”

Ewen Macleod, Bar Standards Board Head of Professional Practice, said: "The BSB is pleased to have entered into a working agreement with regulators from the legal, financial and property sectors. To ensure consumer protection and market integrity in today’s rapidly changing legal services market, regulators must work together with key regulatory partners and cooperate and communicate constructively. Under this agreement, the various regulators will coordinate resources and activities to avoid duplication of effort and to increase consumer protection."

All parties have agreed the text, with minor variations for the FSA which take account of specific rules that apply to that sector. The MOU is non-binding and comes into force from today (3 May). The signatories to the MoU are the five main legal regulators—the SRA, Bar Standards Board, ILEX Professional Standards, Council for Licensed Conveyancers and Intellectual Property Regulation Board—and seven external regulators or professional bodies. They are the Financial Services Authority, the Law Society of Scotland, the Royal Institution of Chartered Surveyors, the National Federation of Property Professionals, the Institute of Chartered Accountants of Scotland, the ICAEW and the Ministry of Justice acting as the Claims Management Regulator.

 
Print page to PDF