Responsibilities of managers, COLPs, COFAs

Requirement to comply, and responsibility and accountability for compliance

The SRA's regulatory arrangements, the SRA Principles, Code and Rules as set out in the Handbook, apply to authorised bodies, managers and employees. So there is a requirement on all of these bodies and individuals to comply.

Responsibility for ensuring compliance with the regulatory arrangements lies with the authorised body and its managers (SRA Authorisation Rules 8.1(a)(i)). It is the body and managers that will be held to account for non-compliance.

An authorised body must at all times have suitable arrangements in place to ensure the body, its managers and employees comply with the SRA's regulatory arrangements (SRA Authorisation Rules 8.2(a)(i)). It is the body and its managers that will be held to account for non-compliance with this requirement.

An authorised body must have suitable arrangements in place to ensure that its compliance officers are able to discharge their duties in accordance with the rules. (SRA Authorisation Rules 8.5(a)). It is the body and its managers that will be held to account for non-compliance with this requirement.

A COLP must take all reasonable steps to ensure compliance with the regulatory arrangements (except the SRA Accounts Rules), (SRA Authorisation Rules 8.5(c)).

A COFA must take all reasonable steps to ensure that the body and its employees and managers comply with any obligations imposed on them under the SRA Accounts Rules, (SRA Authorisation Rules 8.5(e)).

Reporting

There is a requirement (Outcome 10.3) to notify the SRA promptly of any material changes to relevant information including serious financial difficulty, action taken by another regulator and serious failure to comply with or achieve the Principles, rules, outcomes and other requirements of the Handbook. Responsibility for compliance with this Outcome lies with all those covered by the Handbook but, in practice, responsibility and accountability for compliance with this Outcome will lie with the body and its managers under Rule 8.1 (a)(i) of the Authorisation rules (pra 2 above).

The COLP must report material failures to comply with the regulatory arrangements (excepting the SRA Accounts Rules) (SRA Authorisation Rules 8.5(c)(ii)).

The COFA must report any material failure to comply with any obligations imposed upon them under the SRA Accounts Rules (SRA Authorisation Rules 8.5(e)(iii)).

Is there any overlap between the roles of COLP and COFA?

What is a clear delineation of responsibilities (as set out above) has been confused by references to Rule 1.2 SRA Accounts Rules which repeats (the already existing) requirements to comply with the SRA Principles and the outcomes in Chapter 7 of the Code. The suggestion being that this makes the COFA responsible for the systems around sound financial management in the firm and reporting compliance failures about them.

This is not the case, responsibility for ensuring compliance with Chapter 7 of the Code lies with the body and its managers. Responsibility for reporting serious financial difficulty under Outcome 10.3 lies with the managers and with the COLP.

However, given the necessary close interaction between the operation within a firm of the client account and other financial systems, it is undoubtedly the case that, in order for the COFA to undertake their role effectively, they should have involvement over the totality of the financial management of the firm. The SRA Authorisation Rules 8.2(a)(i) and 8.5(a) require the body to have in place suitable arrangements to ensure compliance and suitable arrangements to ensure that compliance officers can discharge their duties.

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