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.

 

Regulation 21 Independent Audit – Anti Money Laundering Regulations (MLR) 2017

It is a regulatory requirement for most firms to carry out an ‘Independent Audit of AML Policies, Controls and Procedures’ and is essential to comply with Regulation 21 of the Anti-Money Laundering Regulations. Failure to undertake this audit results in failure to comply with the Regulations and it remains your responsibility to the SRA to ensure this is done effectively.

The problem for many firms is how to satisfy the ‘independence’ requirement of Regulation 21 (1) (c) of the MLR 2017. You are allowed to carry out an audit internally, but it should not be carried out by the MLRO or the MLCO, or anyone else responsible for maintaining the AML function within the firm. Typically, in-house employees with sufficient expertise, who would be capable of undertaking an audit of this type are those who have day-to-day responsibility for designing, implementing and monitoring the application of the firm‘s anti-money laundering policies and procedures. Therefore, it could be difficult to comply with the ‘independent’ requirement under Regulation 21 or the MLR 2017.

We recognise this issue, and our service provides firms with a truly independent audit and report which meets regulatory requirements and is specifically designed to comply with the requirement of the MLR 2017. It is recommended that a law firm performs such a review every 2 years although large firms may consider that annually is more appropriate.

Person wearing suit pressing digital image 'audit'.

Find Out More

For more information about our Regulation 21 Independent Audit, you can call us on 0203 911 9710 or you can email us at info@thestrategicpartner.co.uk. You can also find out more about this service by clicking on the brochure link below.

Get In Touch
Our Brochure

Regulation 21 Independent Audit – The Detail

The Strategic Partner works with firms of all sizes, from the smaller high street or niche firms through to the large multi-office and multinational firms.

Our service provides firms with a completely independent audit and ensures the review is completed and reported on in accordance with the regulatory requirements.

Our Independent AML Audit includes:-

  1. Discovery meeting to scope out and agree to the approach and focus of the review.
  2. Policies have been written to document how the firm complies with the MLRO 2017.
  3. A review and analysis of the firm’s High Risk and Suspicious Activity Register
  4. Interviews with staff to consider the practical application of a firm’s AML PCPs and to establish understanding and knowledge.
  5. Optional file reviews to consider the application of a firm’s AML PCP requirements at 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:-
    1. PCP Analysis
    2. Application
    3. Analysis of trends
    4. Recommendations

The regulation 21 independent audit extension will further include a review of the approach adopted by the firm for compliance with AML regulations.

Our Expertise

Our goal is to work with the firm to help them build a robust risk management profile that is independently assessed and receives recognition and credibility from the firm’s Professional Indemnity Insurer.

To further bolster a firm’s approach to overall risk control, regulation and compliance, The Strategic Partner has developed two services that can be utilised as part of a fully outsourced solution. Full details of each service can be viewed by clicking the links below, but a summary of each service is as follows:-

• Risk, Regulation and Risk Compliance Services including AML – Our Risk, Regulation and Compliance Service has been designed to provide law firms of all sizes with a compliant environment, using bespoke, documented and implemented procedures that evidences how a firm tackles and manages risk, compliance and regulation. Our experience and focus provide law firms with the required and necessary support and expertise.

• Risk Compliance & AML Guidance and Administration Service – Our Risk, Compliance & AML Guidance and Administration Service provides law firms with a cost-effective solution to outsource the management of the firm’s registers and to provide day-to-day compliance guidance to the staff. It provides law firms and their staff with direct access to a dedicated Compliance Manager, who will provide case-level guidance and accept receipt of notifications, through which they will also manage and update the various compliance registers.

Enquiries

For more information about our Auditing services, you can call us on 0203 911 9710 or you can email us at info@thestrategicpartner.co.uk.

Other Consultancy Services…

CMS Support
Finance & Banking
Succession & Exit Plans
Mergers & Acquisitions
Law Firm Marketing
IT Case Management

Click here to complete an enquiry form and we will contact you

Or you can contact us here

Call us: 0203 911 9710

Email us: info@thestrategicpartner.co.uk

Hit enter to search or ESC to close

May We Suggest?

#cofa #colp #Cyber Risk #firm fined #Mergers & Acquisitions #Risk Management #source of funds #sra
Members & More