Compliance for law firms call – Changes to LSAG guidance
In this week’s session, Kate provided clarity around the updated LSAG guidance covering; ‘reasonable measures’ when verifying the identities of Beneficial Owners, to move away from old EU High Risk Third Country lists and gear towards UK’s own list. There were discussions on minor clarifications on Legal Professional Privilege and clarification on what is not an ‘arrangement’.
LSAG guidance approved by HM Treasury
The Legal Services Affinity Group (LSAG) is made up of both regulatory and representative bodies for legal services in the UK. It has produced guidance on the anti-money laundering (AML) regulations, which for firms supervised by the SRA for AML now constitutes official guidance. This guidance has been recently approved by HM Treasury after it had been in review for a while, whilst many firms have been adopting the recommendations.
During the compliance call, a few polls were created to discover what firms have been doing in terms of implementing LSAG and how many have read and understood the guidelines.
It was interesting to find that 65% had largely implemented but only 8% had fully implemented the draft and 27% had only started the work on LSAG.
Furthermore, it was established that 42% had read and understood the guidelines, 50% have read the LSAG guidelines but still have some gaps and only 8% had not read the guidelines at all.
Overall, it is great to see that most firms have started working to incorporate the latest LSAG guidance but not all, therefore a bit more needs to be done on this. As mentioned by a few participants on the call that “the guidance needed more clarity and consistency”
So, what does this mean for firms?
In accordance with the updated LSAG guidance, firms must consider the guidelines and decide how to comply with the regulations, focusing on;
· Policies, controls, and procedures
· Internal controls
· Training
· Enhanced due diligence on politically exposed person
For a full read of the guidance click on the following LSAG Guidance from SRA We must warn you, although the document is easy to read and well structured, it is still over 200 pages of guidance!
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