All Change – New SRA Accounting Rules – what you need to know
The Legal Services Board has recently approved sweeping regulatory reforms proposed by the SRA under its Looking to the Future programme. The changes are expected to be effective from Summer 2019 according to current information.
Included within the changes is a new set of Accounting Rules. The new rules are shorter, less prescriptive and much more outcomes-focused. All of the old timescales (14 days, 2 days, etc) have been removed, and firms will be given the freedom to decide on their own time frames. The rules also give firms the option of using Third Party Managed Accounts (TPMAs), instead of holding money in client account.
The SRA has said that it expects most firms to carry on doing what they have always done when handling client money, at least to begin with. It is not quite as easy as that though, as many firms will need to make some changes to current procedures.