The year 2017 has been busier than most in compliance and 2018 shows no signs of slowing down.
So, what should you have ticked off your to do list by now, and what do you need to add for the new year?
At the end of the CPD year in 2016, the 16 hours required minimum CPD was removed, and replaced with Continuing Competence. During the 2017 Practising Certificate renewal process, Solicitors were required to give a declaration in relation competence – “
I have reflected on my practice and addressed any identified learning and development needs". Firms should have communicated the changes to their Solicitors, and ensured that they have reviewed the SRA Competence Statement and planned to complete any learning where a need has been identified. I presented a webinar for firms earlier in the year, so if this is still on your list, you may find it helpful click here.
2.Money Laundering Regulation
The Money Laundering, Terrorist Financing, Transfer of Funds (Information on Payer) Regulations 2017 came into force on 26th June 2017, only 3 days after the final draft regulations were released. These Regulations are the biggest change in AML legislation for a decade and require a considerable amount of work to implement. Many firms are still working through the requirements, preparing risk assessments, reviewing policies and procedures, and changing CDD procedures. The Legal Sector Guidance is still in draft form, and many firms are holding off finalising changes until it is approved by the Treasury, which I now expect to be in early 2018. The SRA did indicate that their approach to enforcement would be proportionate, but they have recently indicating that they will be surveying the profession in early 2018 to find out how they are complying. We released a webinar when the regulations were passed in the summer, to flag up the issues which you need to be considering, sooner rather than later. Click here to watch the webinar recording in full.
3.Criminal Finances Act 2017
The Criminal Finances Act is the Government's response to the first UK National Risk Assessment in relation to Money Laundering. Several areas were identified where legislative change could help fight financial crime. Much of the Act is not yet in force, but on the 30th September, the new Corporate Offence of Failing to Prevent Tax Evasion was implemented. Firms will be liable if they have failed to put in place reasonable procedures to prevent a person associated with it (an employee or agent) from facilitation facilitating tax evasion. The consequences are fines for the firm, risk of regulatory sanctions, and reputational damage. I wrote an article and presented a webinar which may be useful to firms who have still yet to so establish the required policies and procedures. In 2018 other parts of the Act will be implemented. There will be extensions to the powers which the National Crime Agency have to request information from reporters, and they may be given more time to investigate cases before they need to give consent. We will update you on these provisions when we know when they will be in force. Click here to watch the webinar recording.
At the top of the compliance to do list for many firms is the implementation of GDPR, which will apply in the UK from 25th May 2018. There is certainly a lot to think about. Firms will need to think about what data they hold, and for what reasons. They will need to think about how they can use data from former clients, dealing with subject access requests in the new shorter time scales. Lockton have some material on this and if your firm is not already on the way to getting compliant with GDPR, this should be a high priority in the New Year.
5.SRA Code of Conduct
Next year we are also expecting substantial changes to the SRA code of conduct, which may require changes to your policies and procedures. It is intended that the new code will allow more flexibility for law firms, moving further away again from rule based regulation. We will be providing articles and webinars on the new code and accounts rules as soon as they are confirmed, so watch out for those.
Planning now for the considerable amount of work to do for the rest of 2018 will help you find the time to fit it all in, and get compliant as soon as possible [If you need any support with these issues do get in touch and we will see how we can help].