The SRA and small firms Our Support for Small Firms Robert Loughlin – Executive Director Patrick Reeve – Regulatory Consultant

Objectives Update on SRA initiatives Trends and observations Regulatory changes Regulating Small Firms – topic paper Continued engagement

SRA initiatives SRA web section for small firms and sole practitioners Ethics and Guidance – option for small firms and sole practitioners Supervision team – practical help for small firms with regulatory issues and compliance Small firms and sole practitioners virtual reference group

Trends and observations Calls to Ethics and Guidance: 20 percent of calls via the dedicated small firms line Advice typically sought on client care, confidentiality, publicity and SRA Accounts Rules Issues raised with our Supervision team Managing closure of firm Firm restructure SRA firm interventions Intervention grounds include suspected dishonesty, bankruptcy and disorderly closure due to illness or incapacity of sole practitioner

Regulatory changes Authorisation of sole practices ‘‘Deemed approval’ of COLP/COFA where the individual is a lawyer manager in a firm with a turnover of less than £600k Authorisation - operational changes and improvements Guidance on recording of non-material breaches: providing further clarification and guidance on the current requirements

Regulatory changes (cont.) Accountant’s report rule changes:  firms with £10,000 or less average client account balance and a maximum client balance of £250,000 will no longer need to obtain an accountant’s report  for other firms where a report is required the existing, rigid requirements on accountants' reports are set to be relaxed Qualification as a solicitor through an apprenticeship route

Looking ahead Regulatory reform  Review of the SRA Handbook  Continued review of the SRA Accounts Rules  PII requirements and how the Compensation Fund operates Operational reform  Online forms and applications  Shorter process times  Easy access to web guidance and material

Regulating Small Firms – topic paper Risk Outlook 2015 launched in July Highlights “priority risks” (dedicated web section) Risk Outlook Autumn Update will include a paper specifically for small firms Will highlight common risks and issues and contain helpful information Topic paper publication - 23 November 2015

Regulating small firms – topic paper Content will include: Information about getting authorised How regulatory reform looks to benefit small firms Answers to common questions The types of regulatory issues some smaller firms face Information about how to control these issues Case Studies

Regulating small firms - issues Regulatory arrangements (structure of firm, COLP/COFA, PII etc) Applying to become an RSP following loss of partner Failing to appoint a COLP and COFA PII issues – claims history and cost Unsure about how we construe and apply our rules and regulations

Regulating small firms - issues Cybercrime and information security UK wide issue Firms targeted because they hold personal data and conduct financial transactions Case studies in Risk Outlook 2015 Systems and controls don’t have to be expensive

Regulating small firms - issues Supervising your employees Access to client account Access to confidential information Case studies available in Risk Outlook 2015 The “priority risks” web section

Engagement with you We are looking for other ways to help you Consultation on regulatory changes VRG being used to inform a number of projects – including the review of the SRA Handbook alerts Updated information/sections on the small firms web section SRA events Supervision small firms team

Questions?