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Regulation 21 Independent Audit
November 4, 2022

 1. Introduction

Further to our recent newsletter ‘Annual Anti Money Laundering Report Highlights Independent Audit Concerns and the SRAs clear expectation for a Regulation 21 Independent audit to be performed by firms details of how The Strategic Partner can assist in delivering this review are as follows and further details in the attached brochure.

Regulation 21(c) of the MLR 2017 required a Firm to:-

“establish an independent audit function with the responsibility:

  • to examine and evaluate the adequacy and effectiveness of the policies, controls and procedures adopted by the relevant person to comply with the requirements of these Regulations;
  • to make recommendations in relation to those policies, controls and procedures; and
  • to monitor the relevant person’s compliance with those recommendations”

 

2. Solutions

 2.2 Firms who are part of our Compliance Service

If your firm is already part of our compliance service we will already be providing for you, as standard, at least 1 risk and compliance audit every year as standard. This review goes part way to meeting the requirement of Regulation 21.  Should a firm wish to extend the existing service to include the additional requirement of Regulation 21 we are able to do so at an additional cost of £1500. The additional time will extend the existing compliance review to include the following:-

  1. A detailed overview of all changes and updates to the policies relevant to the MLR 2017.
  2. Additional file reviews specifically focusing on the application of the AML policy so there is a larger representative sample.
  3. Additional staff interviews with a focus on AML rather than wider compliance issues, aimed at demonstrating the application and effectiveness of the MLR 2017.
  4. A Directors/Partners Report to evidence the requirement of Regulation 21 of the MLR 2017 and analysing:-
    • The policies
    • The risk assessment
    • The risk profile
    • The application of the PCPs
    • Identifying any concerns
    • Solutions to any concerns
    • A statement of compliance

 

It is also our view that this extended audit should occur every 2 years and not annually (unless the firm would like to) as we believe the general compliance audit performed has a sufficient interim focus to identify any issues with the application of the Firm’s AML approach.

To enhance your existing service please speak directly to your compliance manager or you can call us on 0203 911 9710.

 

 2.3 Firms Who are not part of our Compliance Service

For Firms that are not part of our compliance service, we are able to provide a standalone Regulation 21 Independent Audit with pricing starting from £3000 as detailed in the brochure.

To summarise the brochure, the review will typically take place over 2 days and include:-

  1. Discovery meeting to scope out and agree on the approach and focus of the review.
  2. A review of the firm MLR 2017 policies (PCPs) to confirm they are compliant including identification of any gaps or missing policies.
  3. A review and analysis of the firm’s High Risk and Suspicious Activity Registers.
  4. Interviews with staff to consider and evidence the practical application of a firm’s AML Policies Controls and Procedures (PCPs) and to establish understanding and knowledge.
  5. Optional file reviews to consider the application of a firm’s AML PCP requirements at the case/matter level.
  6. A formal report detailing the information obtained in the review, the current approach adopted by the firm and identifying any gaps with a series of recommendations and solutions
  7. Presentation of the findings to the partners.
  8. A Directors/Partners Report to evidence the requirement of Regulation 21 of the MLR 2017 and analysing:-
    • The policies
    • The risk assessment
    • The risk profile
    • The application of the PCPs
    • Identifying any concerns
    • Solutions to any concerns
    • A statement of compliance

To book or discuss a review you can call us on 0203 911 9710 email us info@thestrategicpartner.co.uk and we will call you.

If you want to enquire about how you can access our Compliance Service and take advantage of the lower price as detailed above we can discuss this with you as the Regulation 21 Independent Assessment can be built into the overall service.

 

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