While no full formal review of the relatively new SRA Accounts Rules is underway (a review five years after implementation is planned) the SRA are due to consult on some proposed updates over the next few months.
The changes to be consulted on are:
- Rules 2.1(d) and 4.3 – definitions and treatment of money relating to the firm’s costs
- Rule 10 – operation of a client’s own bank account
Our understanding is that the consultation will propose these rules be amended to reflect what is contained in the current guidance on these two areas. This will have the effect of clarifying the rules themselves.
The current views and expectations are expressed in the SRA’s Guidance ‘taking money for your firm’s costs’ and ‘statement of our position regarding firms operating a client’s own account’.
There are recognised anomalies in the definitions of client money versus ‘office’ money in rule 2.1(d) versus rule 4.3 and tightening these up within the rules themselves, rather than via guidance, would make sense.
Rule 10, as currently written, has caused difficulties in terms of full compliance for some firms in certain circumstances. The SRA recognised this and issued the guidance referred to above. Again, we expect that the consultation will propose some ‘adaptation’ of rule 10 to reflect that guidance.
Look out for the consultation over the next few weeks.
*The views expressed are the author’s and not ICAEW’s.