The Legal Services Board has outlined its timetable for the Solicitors Regulation Authority to get its house in order following the Axiom Ince affair.
The oversight regulator had already stated that changes should be made within the next year after its report into the handling of the closed firm.
The proposed changes involve greater scrutiny of mergers and acquisitions, more analysis of firms’ financial situations and improved intelligence sharing for identifying risks.
The key direction was for the SRA to embed new governance structures with greater oversight from its board and regular reporting to its audit and risk committee. Most of these changes have to be by the end of December, but the SRA has until the end of April to improve training to reflect lessons learnt.
At various points in the first half of next year, the regulator must have developed systems to proactively collect and analyse market intelligence, including spotting risks arising from the sale of law firms.
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The LSB also wants the SRA to establish a new approach to assess the potential for consumer or market harm arising from firms’ financial stability, including through obtaining and reviewing firms’ financial and accounting information, and reviewing firms’ financial and accounting information. This is expected by the end of July next year, although there is scope for extending this deadline.
The LSB said in May that the SRA ‘has already developed a robust plan in response to the issues identified in the independent Axiom Ince report and has taken steps to begin addressing the issues identified’.
Implementation will be a key priority for the incoming SRA chief executive Sarah Rapson, who is joining the organisation later this year.
It remains to be seen how the timetable might be affected by the LSB’s ongoing report into how the SRA handled the shutting down of Sheffield firm SSB Law.
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