External review of “eligibility” or “whole firm” issues

We could not have failed to notice the increased regulatory attention to “eligibility” or “whole firm” issues over the last few years. Central to that has been the requirement to complete annual reviews of your client monies and SIP 11 systems, together with the requirement in Regulation 21 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLR17”) to conduct an independent audit of your AML systems. However, there are other areas, such as training, professional indemnity insurance, licence requirements, and complaints that should be checked regularly outside the sort of insolvency case review work we have traditionally carried out. For the rest of this article, I’ll just refer to them as “whole firm issues”.

We have always tried to do as little as we can get away with for each client. We want you to be reasonably compliant, but we recognise that you have to be commercial, so if we are taking up your time and resources, you are not earning money. Maybe we have taken that a bit too far with whole firm issues, relying on you to know that you have to review your AML, clients monies, and SIP 11 systems annually and assuming that you keep evidence of the other whole firm issues as you complete renewals, annual returns, etc. Unfortunately, feedback from the regulators over the last couple of years suggests that some of you are not doing reviews, or are not being sufficiently rigorous when trying to critically review your own systems.

As a result, we have designed a review to cover whole firm issues, either as a stand alone visit early in the year or added onto a regular annual review of your insolvency work. In short, we have taken our usual detailed, risk-averse, compliance approach to whole firm issues and designed a range of checks that should initially cause you some concern, but ultimately should help you improve to a level where your regulator will be confident that you are staying abreast of such issues.

We will be contacting clients direct, but if you are not a client and you would like a review, please contact Bill.