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SRA publishes new guidance on ABS applications

The SRA has published new guidance to assist organisations planning to submit an application to be licensed as an alternative business structure (ABS).

The guidance explains the three-stage application process in detail, starting with the Stage 1 application online. It sets out what applicants can expect from the SRA while their application is being considered, and the SRA's priorities in determining the outcome of applications.

There is additional guidance on specific aspects of the process, such as the Suitability Test. It also provides details of timescales. It clarifies that the purpose of Stage 2 is to work with applicants on the preparation of their detailed application prior to formal submission at Stage 3.

The advantage of this stage is the flexibility it affords to applicants to work with the SRA to highlight and consider amendments to their application which make it more likely to result in a positive licensing decision. The guidance makes it clear that the statutory six-month time limit for consideration of a licensing application begins once applicants have reached the third stage of the process, and the SRA has all the information required to begin a formal consideration of the application and make a decision.

Samantha Barrass, SRA Executive Director, said: "This guidance is aimed at increasing the transparency of the licensing process. There have been some misunderstandings about the complexity of the process and the timescales involved. This makes it clear what applicants should expect and how we can support them in submitting a good application.

"It is essential that the public has confidence in ABSs, so we make no apologies for the robustness of the process. However, we are confident our approach is proportionate and applicants who engage with us and supply the necessary information are better positioned to move smoothly through the process.”

Applicants who feel their applications may be more complex, who are currently outside the SRA's regulatory remit or new to legal services are encouraged to contact the ABS Authorisation Team on 01527 883243 and discuss their application before submitting it.

Ms Barrass said: "The Authorisation Team is there to provide support and guidance. I hope applicants will speak to them if they need advice. We welcome complex and innovative applications and we would particularly encourage early engagement in these circumstances to support building a good understanding of what is required for a successful application.

"Applicants who are dependent on financing should also contact us beforehand, to discuss timescales, before putting finance arrangements in place.”

The SRA has also amended the ABS register, which is available online, to include information about any waivers that have been granted to an ABS as a part of their application.

Eight ABS licences have been issued since the SRA started accepting applications in January. A further 30 have reached the formal decision phase, with 130 at Stage 2 of the process. 

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