Monthly Archives: March 2019

SRA puts firms on notice for money laundering compliance checks

The SRA have today announced a plan to carry out rigorous checks on law firms to make sure they are meeting their anti-money laundering obligations.

The regulator will shortly be writing to an initial sample of 400 firms asking them to demonstrate compliance with the Government’s 2017 Money Laundering Regulations. There are around 7,000 SRA-regulated law firms who fall under the scope of these Regulations.

The SRA want to make sure that firms have a money laundering risk assessment in place and are implementing it. A risk assessment is required by legislation and should be the backbone of a firm’s anti-money laundering approach. If firms are not complying, they will go into the regulator’s enforcement processes.

Each case will be judged on its facts, but if there are serious issues or a lack of willing to resolve issues promptly, disciplinary action will be taken. The SRA also plan to carry out further compliance checks where sector-wide issues are found.

Paul Philip, SRA Chief Executive, said: “Money laundering is far from being a victimless crime and must be taken seriously. Solicitors, as enablers of moving funds around, can willingly or unwittingly be part of the problem. So we expect firms to be vigilant and they, in turn, can expect us to be robust in our enforcement action where solicitors firms are involved in money laundering or are not complying with the relevant legislation.”

The SRA stated that in the last five years, more than 60 cases – linked to potential improper money movements – were taken to the Solicitors Disciplinary Tribunal. This has resulted in more than 40 solicitors being struck off, voluntarily coming off the roll, or suspended from practising.

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SRA confirms November launch date for new Standards and Regulations

The SRA have today confirmed that its new Standards and Regulations will come into effect on 25 November 2019, not this spring as previously advised.

Anna Bradley, chair of the SRA, said the revised date was a sensible move to give everyone – regulators and the regulated community – the chance to amend its methods. She added: ‘By stripping away outdated and unnecessary rules and giving solicitors more flexibility to design and deliver their services around their clients, our new regulations are designed to help people access a wide range of high quality services with the confidence that proper protections are in place. That can only be good for the public and the profession.’

The new regulations will be supported by the SRA’s revised enforcement strategy, which was introduced in February 2019, and sets out to provide greater clarity on the regulator’s approach in cases of potential misconduct.

The SRA has promised a range of guidance over the coming months including initial documents covering areas such as the Accounts Rules, practical application of the SRA Principles and which type of firms and individuals need authorising.

Coinciding with the introduction of Standards and Regulations, November will also see the SRA Digital Badge becoming a mandatory requirement for all regulated firms who run a website. First launched on a voluntary basis in December 2018, the badge uses smart technology to confirm to website visitors that a specific firm is regulated. It also provides a firm-specific link to information on the protections that this status provides to potential customers.