Ahead of the 25 November 2019 introduction of the new rules, the SRA have released in October 2019 additional documents on their website clarifying aspects of the new rules.
Operation of a client’s own account
New Rule 10.1 suggests that 5-weekly reconciliations should be performed for all instances where the firm operates a client’s own account as a signatory; one such example being as a Deputy in a Court of Protection matter.
The SRA has now stated that where ledgers are not maintained for a client’s own account and will not have access to monthly bank statements, the firm will not be regarded as in breach of the above Rule provided that the firm has sufficient internal controls in place to ensure that such matters are adequately recorded and ensuring that client monies are not at risk.
The SRA has provided examples of records which should be maintained, which are:
- central register of the client’s own accounts that you operate,
- separate record of the transactions carried out by you or on your behalf in respect of the client’s own account, and
- record of your bills and other notification of costs relating to that client’s matter
In the above scenario, the guidance from the SRA follows the path the Rules have headed with less emphasis being placed on the detailed Rules themselves, and more on the internal controls the firm has in place to ensure compliance with the Rules. These controls will therefore increasingly be checked by your reporting accountant as part of your annual SRA Accounts Rules compliance review.
Should you have any questions regarding the above, or any aspects of the new SRA Accounts Rules, please do not hesitate to contact Sam Evans or any member of the Professional Practice team on 01772 821021.