FCA to take over AML supervision from SRA for law firms

🐝 We're buzzing to introduce: Compliance Forsyte 🐝 You know that feeling when new legislation lands, the SRA drops another update, 💣 or FATF quietly changes a list and everyone suddenly needs to catch up? 🌎 The team at forsyte are here to help you stay ahead. Compliance Forsyte is your monthly guide to what's happening now and what's coming next in legal compliance. We focus on the developments that will actually land on your desk so you can prepare in good time. What's in our inaugural issue: 🐝 FCA Taking Over AML Supervision - The government's 21st October announcement caught everyone off guard. We break down what it really means and how to prepare. 🐝 Fresh from the SRA Conference - The regulator wants to be more proactive and data-driven. SRA or FCA this is a theme that will be sticking around, we breakdown what you need to do to get there. 🐝 Source of Funds Reality Check - Real findings from the SRA's thematic review, plus what "good" actually looks like when you're trying to evidence your reasoning consistently. 🐝 FATF October Outcomes - The plenary results are in, and some countries are moving off the grey list. Here's what it means for your risk assessments. 🐝 2026 Preview - MLR changes coming and what to expect when the FCA takes charge. This is practical insight from people who've been there - Kayleigh Smale (Head of Compliance) and Jane Pritchard (Product) - who understand both what the regulators want AND the reality of implementing it in busy legal practices. Good compliance isn't about ticking boxes. It's about understanding the story behind the requirements and making it work in practice. Bee 🐝compliant - full issue here: https://lnkd.in/dZdF82ES

The SRA expects regulated law firms, apart from micro firms, to conduct an independent audit at least every two years. Under the MLR 2017, Regulation 21, an Independent Audit assesses not only the firm but also senior compliance officers, including the MLCO and MLRO. While internal audits are possible, they must be carried out by individuals independent of the AML function – a requirement many firms find challenging to meet in-house. RACO, as an independent compliance body, is fully qualified to provide a Regulation 21 Audit, helping your firm demonstrate compliance and maintain confidence with regulators. 👉 Comment or message us “REG21” today to learn more about our Regulation 21 Independent Audit service. #lawfirms #amlcompliance #regulation21 #legalcompliance

🔍 Are law firms keeping up with the SRA’s AML expectations? 🔍  🖼️ The Solicitors Regulation Authority’s 2025 AML report paints a clear picture: UK law firms are under more scrutiny than ever 🔎 More frequent audits 📈 Rising expectations around source of funds and ongoing monitoring 💪 Stronger enforcement where firms fall short The SRA’s findings are stark - almost a third (270) of firms the regulator engaged with are not compliant 😲 While that’s a wake-up call and highlights continuing gaps in AML compliance, it also highlights a sector that’s actively evolving. Firms are investing in technology, embedding firm-wide risk frameworks, and making compliance a strategic priority. At Legl, we see this shift every day. Our latest State of Compliance 2025 report found that: ✅ 84% of firms updated AML processes in the past year ✅ Yet only 60% feel confident they’re keeping pace with regulation ✅ Just 1 in 5 report true collaboration between compliance teams and fee-earners It's more clear now than ever before... Compliance isn’t just a regulatory burden - it’s a business imperative. 👉 Read the SRA’s full AML Report: https://lnkd.in/eUXH9wP3 📘 And explore how compliance leaders across UK firms are responding in Legl’s State of Compliance 2025: https://lnkd.in/er26xrSh

Only 22% of firms fully compliant. Can this be right? " As of April last year, 5,683 law firms were in scope of AML regulations and required to produce appropriate risk assessments and policies and procedures. The SRA reported that having increased its proactive AML engagements from 273 in the previous year to 545, just 22% of firms were found to be fully compliant. Dozens of firms have been fined five-figure sums (all paid to the Treasury) for non-compliance in the last two years." Government admits potential for regulatory overlap as FCA takes on law firms' AML supervision from SRA | Law Gazette https://lnkd.in/eS9_AyEx #legal #regulation #lawfirm #compliance #aml

What You May Not Know 😃 That “shareholder” title? It comes with risk o! If you own 5% or more of a company, you’re called a PSC ( Person with Significant Control Why is this serious? By law (especially AML laws), companies must have a PSC register. Your details must be listed clearly. Why? If the company is ever linked to money laundering or shady deals, EFCC can lift the company veil and come straight for the PSCs, yes, even if you’re not involved in daily work. What to do to protect yourself: 1.Before agreeing to be a PSC/shareholder, know exactly what the company does. 2. Get a legal agreement that explains your role. 3. Make sure the company is following AML and SCUML rules, and keeping proper records. Don’t just carry title, understand what comes with it. Be wise. Be informed I am your business and compliance lawyer. I don’t just register your business, I help you stay aware and compliant.

As many in the legal sector will have seen, the government has announced that the FCA will assume responsibility for AML supervision, removing this function from the SRA. From a compliance perspective, this marks a major shift in expectations and oversight for law firms. The FCA’s approach to regulation is often more prescriptive, data-driven and less tolerant of inconsistency, which will undoubtedly reshape how firms evidence compliance and risk management. For COFAs and Compliance Officers, the coming months will be critical for understanding what this means in practice; from reporting obligations to audit readiness. It’s a pivotal moment for the profession and one that calls for proactive preparation rather than reaction.

One of the main reasons I started Legl was because, while founding and running CrowdJustice, it became clear to me that the operational requirements of running a regulated law firm were immense, and growing – from AML compliance to cashflow management, to delivering good client experiences - the business of law often took a backseat to the practice of law. The announcement this week in the UK that the FCA will take over regulatory responsibilities from the SRA for AML has caused a bit of consternation among the legal profession -- in particular the concern that we could move from a principles-based approach to a rules-based approach, and that the operational burden will increase still further. We're really proud of our mission @ Legl to enable firms to drive growth and run profitable businesses while meeting the highest AML compliance standards -- no matter how those change. This week's announcement was a reminder too to shout out the often unsung-heroes of the backoffice and compliance teams in the hundreds of firms we work with, who are constantly adapting and driving performance and compliance – and enabling clients to get access to legal services seamlessly and without delay - even in an ever-changing regulatory landscape.

📌 Announced today: The FCA will become the single supervisor for AML and counter-terrorist financing across the entire professional services sector. It’s a major shift, affecting law firms, accountants and TCSPs. Here’s what I think is worth watching: 🔄 Consistency vs. Context A single supervisor means consistent expectations. But will the FCA’s approach reflect the nuances of different professions? Legal, accounting, trust & corporate services - each has its own risk profile and operational realities. One size rarely fits all. 📊 Data-driven supervision The FCA has the infrastructure to use data at scale. That could mean smarter, more targeted oversight. But it also raises questions: Will firms be expected to submit more granular data? Will risk assessments need to evolve to match? 💸 Cost and complexity This will no doubt be the hottest topic. Professional bodies will be concerned, and smaller firms especially may feel the pressure. Will the FCA offer scalable models of supervision, or will everyone be held to the same standard? 🧠 Culture shift The FCA’s style is different. More formal, more enforcement-focused. For firms used to guidance-led supervision, this could feel like a culture shock. 📍 Compliance Officers: Here's what to do today - Start internal conversations with your MLRO and senior leadership - Review your current supervisory arrangements and risk framework - Keep an eye out for transitional guidance from HM Treasury and the FCA I’m curious - how do you think this will land in your firm or industry? A welcome change? Or just another regulatory headache in disguise? Drop your thoughts below 👇 #compliance #aml #antimoneylaundering #regulation

𝗨𝗞 𝗹𝗮𝘄 𝗳𝗶𝗿𝗺𝘀 — 𝘁𝗵𝗲 𝗦𝗥𝗔’𝘀 𝗼𝘂𝘁. 𝗬𝗼𝘂𝗿 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆’𝘀 𝗶𝗻! As you (now) know, the SRA’s AML supervisory powers are about to move elsewhere. No shock there. [𝘕𝘦𝘷𝘦𝘳 𝘩𝘦𝘢𝘳𝘥 𝘰𝘧 𝘵𝘩𝘦 𝘚𝘙𝘈? 𝘛𝘩𝘪𝘴 𝘰𝘯𝘦 𝘱𝘳𝘰𝘣𝘢𝘣𝘭𝘺 𝘪𝘴𝘯’𝘵 𝘧𝘰𝘳 𝘺𝘰𝘶] But here’s what matters: that shift creates a rare, 𝘴𝘩𝘰𝘳𝘵-𝘭𝘪𝘷𝘦𝘥 moment to shape what comes next. As a former regulator, I know how these transitions really unfold: how new teams learn, where they look for guidance, and how quickly first impressions form. And right now, their learning curve is your window. Supervisors tend to do one of two things: either apply what’s worked in their previous world, or bring in people from the industry to help them understand the new one. Either way, they’re deciding what “good” looks like, and firms that engage 𝘯𝘰𝘸 will help define it. This isn’t about you being able to lower standards. Rather it’s about building smarter, more sustainable, behaviourally informed AML approaches that actually fit the human reality of legal practice. If your AML processes feel more like a maze than a safeguard, now’s the moment to rethink them; 𝘣𝘦𝘧𝘰𝘳𝘦 𝘵𝘩𝘦 𝘯𝘦𝘸 𝘳𝘦𝘨𝘪𝘮𝘦 𝘣𝘦𝘥𝘴 𝘪𝘯. If you’ve seen me present or followed my work and thought, “𝘸𝘦 𝘴𝘩𝘰𝘶𝘭𝘥 𝘵𝘢𝘭𝘬 𝘵𝘰 𝘩𝘪𝘮 𝘢𝘣𝘰𝘶𝘵 𝘵𝘩𝘢𝘵”, then this is exactly the kind of shift we can take advantage of. You bring the AML expertise. I’ll bring the regulatory insight and behavioural smarts. Together, we can build something sharper, lighter — and much cleverer — than compliance by habit. And right 𝗻𝗼𝘄 is the perfect opportunity. —————————————— 👋 I'm Christian. I'm not a lawyer, but I am a recovering regulator and compliance officer. These days, I help organisations have more effective and engaging 𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 programs by infusing them with 𝗯𝗲𝗵𝗮𝘃𝗶𝗼𝘂𝗿𝗮𝗹 𝘀𝗰𝗶𝗲𝗻𝗰𝗲 and 𝗰𝗿𝗲𝗮𝘁𝗶𝘃𝗶𝘁𝘆.

Preparing for Tranche 2 – What Australia’s AML reforms mean in practice Webinar Wednesday 29 October, 1600 (AEST) Australia is on the brink of the long-awaited Tranche 2 AML/CTF reforms, and the impact on lawyers, accountants and other professionals will be significant. The reforms will bring Australia in line with the UK, EU and other jurisdictions by mandating a risk-based approach to client due diligence, firm-wide risk assessments, and enhanced ongoing monitoring. In this free webinar, our partner VinciWorks’ AML experts Nick Henderson-Mayo and Naomi Grossman will break down what Tranche 2 means in practice, what lessons can be learned from the UK and Europe, and how you can prepare your firm before the laws take effect. What we’ll cover: - What Tranche 2 reforms are expected to require from lawyers and other professions - Lessons from the UK and Europe on risk-based compliance - Conducting practice-wide risk assessments that regulators expect to see - Enhanced due diligence (EDD): triggers, challenges and best practices - Source of funds and source of wealth: getting the client story right - Ongoing monitoring, red flags, and how to avoid reputational risk - The growing challenge of proliferation financing and its link to sanctions Why attend? Tranche 2 is coming fast. Firms that fail to prepare risk scrambling once obligations take effect. This session gives you practical tools, case studies, and free resources to help you start building compliance frameworks now. Join for Free https://buff.ly/HVtndWe