New SRA accounting rules – what’s changing?

The current Accounts Rules are made up of over 40 detailed requirements, making it difficult for firms to fully understand what is required of them, as well as giving firms no flexibility to adapt them to their own practices and decide how best to look after client’s money.

The new rules coming into effect 25 November 2019 will see a much-needed simplification, being less prescriptive and a lot more targeted.

The SRA have cut down to only 13 rules, outlined in just over 6 pages.

So, what are the key changes?

1. To simplify the Accounts Rules – focusing on key requirements for keeping client money safe. The 14 day rule will now be replaced with the word “promptly”, which will feature in most of the other rules.
2. Change the definition of client money – such change may mean that some firms may no longer need a client account hence, reduce compliance costs for firms due to potentially no longer requiring an Accountant’s Report.
3. Provide an alternative to holding client money – introducing Third Party Managed Accounts (TPMAs) as a means for managing payments and transactions.

To support the new Accounts Rules (and other regulations) the SRA has issued guidance on several areas to assist solicitors as these changes come into effect. The guidance is available on the SRA’s website www.sra.org.uk/solicitors/guidance/guidance.page.

Note: changes will be effective immediately from 25 November 2019!

Find out more about changes to take place here.

(http://www.sra.org.uk/sra/news/press/standards-regulations-start-date-2019.page)

Disclaimer - All information in this post was correct at time of writing.