The SRA paused the COLP and COFA separation rules on 1 October 2026: what was coming, why it stopped, and what a small firm does now

On 1 October 2026 the SRA paused a rule change that most small firms had not yet planned for and some could not have met. This is what it was, why it stopped, and what the roles require in the meantime, because the pause changes the deadline and not the duties.

What the rule was

Every authorised firm must have a Compliance Officer for Legal Practice and a Compliance Officer for Finance and Administration. In most small firms both roles are held by partners, and in a two- or three-partner firm often by the same person, who also owns the firm.

The new rule would have prevented a manager with unilateral decision-making power from acting as COLP or COFA where the firm's turnover exceeded £600,000 or it held more than £2 million of client money. A sole owner-manager could have remained COLP but not COFA. In practice: a three-partner conveyancing firm with £900,000 of fees and the client account that goes with it would have had to find someone other than its controlling partner to be COFA, and in some structures someone other than any partner.

It was due to take effect in January 2027, following Legal Services Board approval.

Why it was paused

The SRA's statement cited the risk of unintended consequences, particularly for smaller firms. The Law Society had argued in September 2026 for a targeted risk model instead of thresholds. Firms were being asked to appoint compliance officers they did not have, or to restructure decision-making to create a role, with a few months' notice.

The SRA says it will consult on revised proposals in the coming weeks. If the revision needs the Legal Services Board's approval again, January 2027 is unlikely to hold.

What a small firm does now

Nothing structural, yet. Do not appoint or restructure against a rule that is paused. Watch for the consultation and answer it; small firms' answers are the ones the pause was about.

Run the roles properly as they are. The pause does not touch the existing duties. The COLP is responsible for the firm's compliance with its regulatory arrangements and for reporting material breaches; the COFA for compliance with the Accounts Rules. Both must have the authority and the time. The documents the SRA asks for from its desk, the AML suite, the transparency pages, the AI policy, the complaints log, are the evidence that the roles are being done.

Write down who decides what. The paused rule was about unilateral control. A firm whose partnership deed and compliance plan show that compliance decisions are taken by the partners together, with the COLP's and COFA's advice minuted, has already answered the concern behind the rule, and will be better placed whatever the revision says.

Prepare for the thresholds anyway. A firm near £600,000 of turnover or £2 million of client money should know which side of each line it sits on at every year end, because the revised rule is likely to keep some threshold.

Why 1 October matters twice

The pause landed on the day the SRA's renewal cycle opens and the day most professional indemnity policies renew. Firms completing their renewal declarations in October 2026 are declaring the compliance officers they have, under the rules as they stand; nothing in the declaration changes because of the paused rule.

In the firm

An AI File Opener set up by Overlyft keeps the compliance calendar, including the SRA consultation dates as they are published, and holds the documents the COLP and COFA sign so they are findable when the renewal or an inspection asks for them. The roles themselves are the partners'; nothing here is delegated to a tool. This is general information from the published report of the SRA's decision, not legal advice.