SRA paper dims expectations of faster timetable for ABS rollout

The Solicitors Regulation Authority (SRA) is set to hold firm on the start date for Alternative Business Structures (ABS), despite calls from law firms to allow early agreements.

In July last year the regulator stated that firms would be prohibited from signing agreements with outside investors ahead of 6 October 2011.

This prompted a number of firms to request that the SRA relax the schedule and allow them to sign up to deals to receive external investment ahead of the issuance of the first ABS licences next year.

The SRA is set to take a final decision on whether to relax its guidance at a board meeting tomorrow (10 September), but has published a consultation paper which strongly indicates that it will not change its stance.

The paper says: "The SRA will focus on providing assistance and guidance to facilitate the implementation of ABS after 6 October 2011 but will not relax the guidance, because regulatory mechanisms applicable to ABS in order to protect the public and as mandated by Parliament will not be in place until then."

Without any changes, firms will remain prohibited from signing binding agreements with investors ahead of October 2011, but will be able to discuss future arrangements with investors as long as the final decision is taken after the implementation of the new rules.

Tony Williams (pictured) of legal consultancy firm Jomati commented: "The message up to now has been very much 'don't jump the gun'. There was a hope around a year ago that we would have an interim regime but it is becoming very clear that will not be the case."

However, the SRA confirmed that a final decision has yet to be made, with a spokesperson commenting: "The paper was produced to prompt discussion. In light of that paper it is now up to the SRA board to take a decision."