SRA supervision

A decision to engage in supervision is normally triggered by a specific event (such as a report of misconduct, a significant change to a firm’s composition or a deterioration in a firm’s financial position) or a thematic review.

The supervisor will engage with a manager of the firm by telephone or in a meeting in order to obtain further information on the risks faced by the firm and the firm’s plans to manage those risks. The supervisor will identify the steps required to control the risks, ask the manager to take those steps and monitor the position to check that the steps are taken and that they are effective.

SRA enforcement

A case can quickly progress from supervision to enforcement if the SRA considers that there has been serious misconduct, that a risk cannot be addressed by working with the firm or that a firm is not prepared to cooperate. In practice, that progression can take place rapidly and without notice or warning to the firm.

If a case proceeds to enforcement, the supervisor will remain in control of the case but might ask other supervisors and other SRA staff such as forensic investigators to assist. A firm may then be expected to deal in quick succession with a number of requests for details of the steps taken to address a risk, for information for enforcement purposes and for explanations as to why the professional rules have been breached.

The requests for information can be enforced by section 44B notices which require responses within a specified period such as seven days. That can place a heavy burden on the management resources of a firm that is attempting to resolve a difficulty.

If you need advice on SRA supervision, section 44B notices or if you are concerned that a period of supervision is progressing to enforcement action, we will be able to advise you.