The Solicitors Regulation Authority (SRA) has amended its rules governing the separation of compliance officer roles after concerns were raised about the impact of the changes on smaller law firms.
The changes relate to the roles of the Compliance Officer for Legal Practice (COLP) and Compliance Officer for Finance and Administration (COFA). The SRA had previously introduced rules requiring greater separation between compliance responsibilities and senior management within certain firms.
The original wording of the rules, published in December 2025, led to concerns within the profession that senior managers and owners could be prevented from holding compliance officer positions. The SRA has now clarified that the restriction applies specifically to individuals who have the unilateral authority to make significant management decisions.
This means that the rules will not automatically prevent every senior manager or owner from acting as a compliance officer. Instead, the focus will be on whether an individual has sole control over significant decisions affecting the firm’s structure, governance, risk management or the handling of client money.
Under the revised approach, an owner or manager who has sole control of a firm will not be able to appoint themselves as a compliance officer. The change is intended to strengthen independent oversight and reduce the risk of compliance failures going undetected.
The SRA has said that firms with shared management and decision-making arrangements may not need to make significant changes to their existing structures. Firms will instead need to consider whether their current arrangements provide sufficient separation of responsibility and effective oversight.
Aileen Armstrong, the SRA’s executive director for strategy and policy, said that the changes do not necessarily mean firms will need to recruit additional employees or appoint external compliance providers. She explained that firms with an existing structure based on shared responsibility may already meet the requirements.
The new separation requirements will apply to firms with annual turnover of more than £600,000 or those holding more than £2 million in client money. The client-money threshold was increased following feedback received during consultation.
There are also specific provisions for sole owner-manager firms. Where such a firm meets the client-money threshold, it will generally need to separate the COFA role but will not necessarily need to separate the COLP role. An exemption will also apply where a firm exceeds the client-money threshold because of an unusual event during a particular year.
The SRA considers the separation of compliance responsibilities an important safeguard for protecting client money and ensuring potential breaches are identified and reported appropriately.
The regulator is expected to publish further guidance on the changes during autumn 2026. It is also working with national and regional law societies and other organisations to provide firms with practical guidance on how to prepare.
The revised rules are expected to be introduced on a phased basis during early 2027, with smaller firms being given additional time to comply.
The changes provide greater clarity for law firms that were concerned about how the original rules would affect their management and compliance arrangements. Firms affected by the new requirements will need to review their existing governance structures ahead of implementation.
