A new Clients’ Money Regulation comes into effect on 1 January 2017 which aims to ensure that accounting firms' client bank accounts are only used for lawful and legitimate purposes and bona fide transactions.
ICAEW’s Clients' Money Regulations apply to all member firms in the UK and Ireland which hold money that is received from a client and which is not immediately due and payable to the firm.
Under the new Clients’ Money Regulation 8A all principals of member firms will responsible for making sure that:
- The client bank account is only used for receiving or making payments relating to accountancy services which have been or will be performed for clients.
- Enough information is obtained and held to make sure that the client bank account is being used for a lawful and legitimate purpose and for bona fide transactions.
- Procedures and training are in place for those members of staff with oversight of the day to day running of the client bank account.
Firms should question all unusual or unexpected transactions to make sure they are legitimate, such as
- Large one-off transactions.
- Funds deposited from an unknown source.
- Requests to transfer or receive money to or from overseas.
- Requests to transfer funds to an unknown payee.
This is in addition to 'know your client' checks and ongoing client due diligence obligations which the firm is required to carry out to comply with money laundering legislation.
Links
Money Laundering Regulations: Accountants’ Registration
ICAEW website: Clients’ money regulations
