The Solicitors Regulation Authority (SRA) has released additional case studies to aid law firms in comprehending their responsibilities in preventing the use of client accounts as a banking facility.
According to the SRA Accounts Rule 3.3, lawyers must not provide banking services to clients or third parties through their client accounts, and all payments made into and withdrawals from the account must relate to regulated services.
This rule was established to address the issue of some law firms offering banking facilities to clients who lacked access to their own accounts, which increased the possibility of money laundering and could be exploited to conceal assets in cases of insolvency or matrimonial disputes.
The SRA has issued these case studies to assist firms in understanding when depositing money into the client account is considered inappropriate. While the case studies are meant to provide general guidance, the SRA warns that each case will be evaluated on its own merits.
The SRA’s CEO, Paul Philip, emphasized the importance of firms not using the client account as a banking facility and stated that the rule generates many questions.
He said: “It is really important that firms don’t use the client account as a banking facility – it can open the door to money laundering or help people inappropriately hide away assets.
“This rule generates a lot of queries and I’ve been asked about it a number of times when meeting with local law societies in the last year. We want to support firms to help them remain compliant. We hope these case studies prove useful.
“The most important aspect for all firms is the rule itself, read that first, and then have a look at the case studies for further help.
If a client requests such services, solicitors should investigate the reasons behind the request and make sure that their approach complies with the rule.
For advice on remaining compliant with financial laws and regulations, get in touch with an experienced accountant now.