The Council for Licensed Conveyancers (CLC) has proposed new rules on how licensed practices handle client money.
The property law regulator said the changes form part of a drive to “reduce regulatory burdens and facilitate innovation” while “keeping client money safe and improving consumer confidence”.
The move follows talks in which CLC-licensed practices identified opportunities for improvement.
Under the proposed changes, the regulator would launch a new Accounts Code – currently used by licensed conveyancers in the handling of client money.
The changes would see the reduction of the time limit on practices for delivering an Accountant’s Report from six to three months. This, the CLC says, would appropriately reflect the importance in identifying potential risks.
Other changes include amending the format of the Accountants Report to allow “greater freedom for reporting accountants to use their professional judgement”. This may mean, for example, amending the provisions so that practices have the freedom to move aged balances of up to £50 into their office account when the client cannot be located.
The current limit of £20 means client accounts must be kept open for a number of years, increasing the administrative burden on practices.
The regulator is also consulting on allowing the use of Third Party Managed Accounts (TPMAs). This would be as an alternative to regulated practices holding client money.
Simon Blandy, Director of Regulatory Standards at the CLC, said TPMAs may offer benefits to legal firms and as a specialist third party firm they are more likely to be better equipped to process and handle cash.
The CLC has indicated that any approved changes are likely to come into effect from January 2020.
Please contact us for advice on the new rules.
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