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SRA guidance on residual client balances and authorisation under rule 20.1(k) of the Accounts Rules
30 August 2014

In October 2014, rule 20.1(k) will be changing and all residual client balances of £500 or less will be dealt with by firms, having met the conditions set out in rule 20.2, without the prior authority of the SRA being sought. For those balances over £500 or not going to be paid to charity, an application must be made, in the usual way, to the Professional Ethics – Guidance team.

Applications for authority under the existing rule may take up to 12 weeks and therefore your firm may decide that it is appropriate to deal with existing balances yourselves once the new rule comes into effect. If this is the case the COFA should note the decision taken and the steps taken in the meantime to trace the clients in order to return the funds to them.

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