The Compliance Partner – December 2022
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During the course of the month, we have published a number of articles in which we discuss regulatory issues directly relevant to law firms and industry professionals. In this month’s Compliance Partner newsletter, we review industry related news along with the latest regulation and compliance updates and advice published by The Strategic Partner.
A message from the Managing Director
We have seen reasonable activity from the SRA over recent weeks with updates to a number of key areas including Supervision, Undertakings, Vulnerable Clients and Sanctions to name a few. The most recent announcement that the SRA will be introducing some changes to the Standard and Regulations STaRs) will also result in general policy updates to ensure full compliance.
The SRA continue to push on with their ‘desk based’ reviews of the firms’ regulation for Money Laundering purposes which has seen The Strategic Partner be very active in assisting firms preparing for the review.
We hope the articles produced by The Strategic Partner not only provide firms with needed information to remain compliant, but also deliver solutions and general guidance.
If Compliance is an area of concern for your firm, or the time has come to look externally for guidance and support, we will be very happy to discuss how the services and solutions offered by The Strategic Partner can be integrated into your firm. Whether you require a one off task such as an independent audit for AML purposes, or entering into an outsource relationship for compliance support. All of our services are adaptable and bespoke to each firm we work with.
Key updates
The SRA Issues Updated Supervision Guidance
Supervision is a fundamental requirement for those delivering legal services to meet the regulatory objectives set out in the Legal Services Act 2007. However, as highlighted in recent guidance released from the SRA on Effective Supervision, merely putting supervision arrangements in place is necessary but insufficient to fulfil firms’ regulatory obligations.
“Firms should take proactive steps to make sure that supervision is working effectively, and supervisors are accountable.”
Furthermore, firms are warned that failure to supervise staff properly and to meet supervision requirements in the Codes of Conduct and rules might lead to enforcement action against a firm, its managers, or its employees, even if that failure has not resulted in direct harm to clients.
Our recent article highlights some of the key points raised in the guidance notes and how firms can ensure they meet the expected requirements.
Read the full article here:
https://www.thestrategicpartner.co.uk/the-sra-issues-updated-supervision-guidance
Financial Sanctions Guidance – make sure you are compliant
Following the Russian invasion of Ukraine, focus on how UK businesses interact with those connected to questionable countries or organisations and the Government’s sanctions regime has increased. It is important to note that the sanctions affect every firm, not just those captured by the anti-money laundering regulations. To ensure you are fully aware of all the changes and to help you understand your obligations, you can read the guidance published by the regulator here:
www.sra.org.uk/sanctions-regime-stay-compliant
Cryptocurrencies and Anti-Money Laundering
While some law firms have started dealing with digital currency transactions, the rest of the legal sector in the UK predominantly seems wary of crypto and most legal services providers have yet to be so quick to follow suit. Some central issues include the potential unethical link between cryptocurrencies and money laundering, the instability of a digital coin’s value and the regulator not yet providing a clear position on digital asset transactions.
While digital currency has been around for some time, there are still some major grey areas, both ethical and regulatory, that should be considered. However, if technology continues to advance and more clients request to pay for services by this method, how should law firms react, especially with the current lack of guidance?
We highlight some potential risks for firms considering cryptocurrencies as payment methods or dealing with clients with crypto assets as funds and what compliance and risk assessment measures firms must have in place.
Read the full article here:
https://www.thestrategicpartner.co.uk/cryptocurrencies-and-anti-money-laundering/
Transparency Rules – SRA to undertake further checks
The SRA has confirmed that they will start further checks of all law firm websites to ensure they comply with their transparency rules. Firms are urged to take a moment to double-check check they are compliant with all the transparency requirements. If you need assistance with a review of your website to ensure you are meeting your obligations, find out about our website audit service from The Strategic Partner.
https://www.thestrategicpartner.co.uk/confirm-your-firm-is-following-transparency-rules/
Annual Anti-Money Laundering Report Highlights Independent Audit Concerns
The Solicitors Regulation Authority (SRA) has published the Anti-Money Laundering annual report 2021-22, which reviews the work it carried out as an AML supervisor over the last 12 months.
Over the last year, the regulator has frequently stressed the importance for firms to take their obligations seriously and has vowed to increase their inspection audits and desk-based review supervision. Within the report, the regulator highlighted areas where firms continue to struggle, which included ‘Independent Audits’
Our recent article highlights those concerns in more detail.
Improvements Required For More Than Half Of The AML Policies Reviewed by SRA
Following on from the article above, we look at further key discovery points and guidance for firms. This article looks specifically at Assessing Risks and Controls, in particular, the AML policies firms must put in place to mitigate against any money laundering risks.
Read the article in full here:
Training and Compliance Solutions
At The Strategic Partner, we have recently seen an increase in various requests from the SRA to evidence records of training, risk and compliance audits, fee transparency on websites, and up to date policies and procedures.
Our goal is to ensure the firms we work with have, and retain a compliant structure enabling the firms, their managers, and owners to focus on the running of their business and servicing their clients.
Prevention is always better than cure when it comes to risk and compliance and a pro-active response will not only keep the regulator from your door but will also help manage costs.
Some of our training and compliance solutions include:
- Regulation 21 AML 2017 Independent Audit – Our service provides firms with a completely independent audit and ensures the review is completed and reported on in accordance with the regulatory requirements. The output of this provides the firm with a written gap analysis and solutions to remedy any issues that rise and ensure the firm is compliant. Find out more.
- Training – Our typical AML Training includes:
- AML Training for ALL staff to meet the firm’s obligation to provide annual training.
- 1-2-1 training for the MLRO and MLCO on their obligations and requirements.
- Practical training for those involved in client onboarding to ensure their ID and AML checks are correctly completed. Find out more.
- File Reviews/Auditing – At TSP we engage with firms undertaking file reviews where we consider procedure, staff, systems and files to ensure the procedures are up to the required standard and being implemented at case level with a report of the outcome.
We will work with you to ensure your firm operates in a fully compliant environment and stays there. Through achieving this, the compliance officers in the business can be assured and confident that their obligations are being met, enabling them to focus on other areas of the firm.
Our flagship compliance products are designed to give law firms cost-effective solutions that maintain an ongoing relationship across a 12 month period and beyond. You can view the 2 packaged services by clicking the following links and viewing our detailed product brochures:
- Risk, Regulation and Compliance Service, including AML
- Risk, Compliance & AML Guidance and Administration Service
We can also help with:
- Detailed Firm Strategic Review
- Risk Assessment and Independent AML Audit Service
- Process and Document Drafting
Members Helpline –
A dedicated helpline for the use of our members to gain direct support and advice regardless of the issue or topic.
As part of your membership, you have access to a dedicated helpline which enables you to raise questions and queries as needed on the issues of regulation and compliance where we will provide guidance and advice as needed. Regardless of the issue from a simple query through to a visit from the SRA, our experienced staff are available to assist you.
Client Referral Scheme –
A work exchange facility that enables you to gain support from other members to provide legal services to your clients that you are unable to handle.
For the full range of membership benefits, please download our brochure here:
Our Partners
We are proud to be affiliated with a range of companies who have been carefully chosen by us for their expertise in the legal sector and who provide various discounts and offers to TSP members. For more information on the range of services they provide, please visit our partners page:
https://www.thestrategicpartner.co.uk/partners/