An SRA consultation has proposed that it stops regulating solicitors’ firms undertaking consumer credit activities. The consultation closes on 15 December 2014.
The effect of the SRA proposal is that firms undertaking any regulated consumer credit activity would be required to seek authorisation direct from the Financial Conduct Authority (FCA). Currently, firms are able to be regulated by the SRA acting as a FCA Designated Public Body (DPB). The SRA makes its proposal on the grounds that:
- it lacks the capability and capacity to implement the changes needed to be compliant with the FCA method of regulation under the new regime,
- the regulatory approach taken by the FCA is significantly at odds with the SRA’s own outcomes-focused approach, and
- most prudent firms would register with the FCA in any case because of the uncertainties of the Part 20 exemption regime.