Pre-Application Requirements
HoLP and HoFA Applicants not previously approved as a CLC HoLP/HoFA or SRA COLP/COFA are required to provide evidence of the steps which they have taken to develop their legal and regulatory knowledge and skills in preparation for carrying out the role they are applying for. Therefore, applicants should provide evidence of having recently completed an externally assessed compliance course/training, targeted at the responsibilities of being an appointed HoLP or HoFA.
Qualified lawyers and finance professionals applying for these roles must also provide evidence of their past 12 months completed CPD training or completed targeted externally assessed CPD activity to raise their awareness of the CLC rules and the wider responsibilities of the role, including compliance related CPD courses to ensure their regulatory knowledge is up to date.
Applicants associated to a switch or hive-off application and who are currently approved as a COLP or COFA, are also required to provide evidence of CPD training and also provide written evidence from the SRA, confirming the dates when they were approved as a COLP or COFA
CLC practices notifying us of a change of HoLP or HoFA.
It is incumbent on the Practice to ensure that the current appointees as HoLP or HoFA remain in post and continue with their compliance supervisory responsibilities until such time a suitable replacement has been approved by the CLC. This may take up to eight weeks. Practices should also ensure, in advance of requesting an application form for a new HoLP or HoFA, that the intended appointee holds a current and valid licence free of conditions (HoLP) and has been put on notice of the CLC’s expectation in regards to eligibility and preparedness to pursue an application.
Fees in relation to this application will be charged to the practice. Please also inform us when the applicant is intended to, in addition to this role, be a Registered Manager and verify that they meet the minimum criteria to apply for the authorisation (as outlined HERE). This is a separate application and will incur additional fees. Additionally it is also important to inform us as to whether the applicant is intending to hold an equity percentage or shareholding.
Occupational and Professional Experience
The HoLP
A HoLP applicant must at a minimum be an individual who is an Authorised Person (qualified lawyer) that holds a current and valid practice licence issued by regulator in England and Wales, free of conditions, and who meets the CLC’s fit and proper person requirements.
A HoLP applicant should be able to demonstrate through their previous employment responsibilities (CV or verification from a current or past employer) or educational attainment that they have the threshold level of experience or theoretical knowledge of managing compliance elements to support their application to become HoLP.
A prospective HoLP should demonstrate an understanding that when the practice ceases to have a HoLP, there is risk to the provision of the legal services and that they are the accountable individual that must inform CLC and confirm that arrangements are in place to source an appropriately skilled and qualified replacement within 28 days (or longer by agreements with the CLC); or trigger regulatory action i.e. a managed closure.
The individual seeking to be authorised as the HoLP should be able to demonstrate that they have previously held a position in which they have been accountable for, including but not limited to, the following types of functions:
a. implementing, monitoring, or reviewing compliance processes and systems; such as GDPR, AML, practice wide polices, such as vulnerable clients, and understanding practice and matter level risk assessments;
b. supervising legal transactions/matters carried out by others to ensure that they are compliant with the appropriate regulators arrangements. The CLC the regulatory arrangements;
c. keeping a record of compliance breaches;
d. preventing and dealing with conflicts of interests and improper influence;
e. managing a practice’s complaints-handling procedures;
f. acting as a formal point of contact for compliance in the practice to the appropriate regulator; and
g. supervising business continuity planning to ensure in the event of an adverse situation the continuity of legal service provision.
The HoFA
A HoFA applicant should be able to demonstrate through their previous employment responsibilities (CV or verification from a current or past employer) or educational attainment, that they have the threshold level of experience or theoretical knowledge of managing the compliance elements of the client account in order to support their application to become HoFA.
A HOFA should have the ability to, or an understanding, of how to extract various reports from the accounting system such as Client to office transfers, client to client transfers, matter listing with balances, cashbook and a reconciliation summary.
The Accounts Code requires reconciliations to be completed at least once each calendar month and the requirements are detailed at paragraphs 13.9.1 – 12.12, see below:
13.9.1 prepare a bank reconciliation statement by comparing the balance on the client cash account with the balances shown on the client bank statements and passbooks (after allowing for all unpresented items) of all Client Accounts and Separate Designated Accounts and any Client Money held by you/the entity in cash;
13.9.2 as at the same date prepare a listing of all the balances shown by the client and office ledger accounts and compare the total of the client ledger credit balances with the balance on the client bank reconciliation statement; and
13.9.3 prepare a reconciliation statement showing the cause of the differences (if any) shown by each of the above comparisons.
13.10 The steps required under requirement 13.9 are:
13.10.1 prepared to a date not more than five weeks after the date to which they were last prepared; and
13.10.2 completed within 7 days of the date to which they are prepared.
13.11 Records maintained in accordance with requirements 13.1 to 13.9 are kept separate from those for any other business. Where the accounts of more than one business are maintained on the same system, they are capable of being reproduced independently by the system.
13.12 You have immediate and unrestricted access to the Accounting Records
Typical (threshold) experience would include at a minimum one of the following:
(a) occupational experience (CV, or validation from a past employer) the ability to extract various reports from the accounting system such as; client to office transfers, client to client transfers, matter listing with balances, cashbook and a reconciliation summary; or
(b) a pass on the CLC Managing Client and Office Accounts Unit; or a Pass on SRA Solicitors Accounts Unit (Level 6).
