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Publish Date : 02-Feb-2015

The HCA has this morning, 30 January 2015, published its decision statement on the consultation on changes to the Regulatory Framework.

As part of that, RPs will from 1 April 2015 have to comply with a new Governance and Viability Standard and the Code of Practice that goes with it.

The Code of Practice has been changed to reflect concerns expressed during consultation. The need to comply with "all relevant law" is still in the standard, however, the Code now makes clear that boards can take a reasonable approach to this. Many RPs had expressed concerns to us about the draft Code's statement on transparency, as it was unclear what the HCA really wanted to know about. Now, the Code has some clear examples of what the HCA expects to be told about, including material fraud and lack of liquidity.

Sharron Webster, partner in Trowers & Hamlins' Governance team, commented: "RPs will no doubt broadly welcome the revised Standard, as it offers clarity and certainty to the sector. The new Code is clearer than the consultation version, and it gives RPs a better idea of what the HCA expects from them.

"There is less good news for those who are planning to register with the HCA in the near future as they will have to comply with the Standard from the beginning, rather than working towards it, as established RPs will do. This may cause difficulties for some start-up RPs. More guidance on this is promised, so watch this space."

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