Brace Yourselves -The SRA are now carrying out Desktop Anti-Money Laundering Audits.
With the intense focus by the SRA on Anti-Money Laundering over the last year or so, it should not be any surprise that the regulator has decided it can’t wait for lockdowns to be over and it wants to get a picture of how firms are managing their Money Laundering obligations, especially as this time last year their AML Directorate Team were carrying out on-site audits, but for obvious reasons that stopped.
So now firms’ Money Laundering Reporting/Compliance Officers (MLRO/MLCOs) will be receiving a letter, normally by email, along with a questionnaire and request for information on their AML systems in the form of a Desktop Audit.
The questionnaire allows the SRA in the first instance to examine the firm’s Policies, Controls and Procedures (PCPS). Once the relevant information has been returned by the firm, a follow up request for matter files will be made so that the desktop “picture” can be completed and the SRA form a view.
It is not known what action the regulator will take for those firms which are unable to demonstrate compliance with their Money Laundering obligations, but given the emphasis being place on it, it is likely that some form of punitive measures would be taken.
For MLROs and MLCOs, if you’re happy that the firm is complying with its obligations then there shouldn’t be anything to worry about. If however, you’re not sure, there are some things that could be checked now, such as;
- The written Firm Wide Risk Assessment (FWRA) (Regulation 18) – when was it last undertaken, and is it up to date including changes such as whether Tax Advice is being given, and that there have been no “triggers” such as an acquisition of another firm or change to the firm’s risk profile that would have necessitated an update between now and the last FWRA?
- Independent Audit Function (Regulation 21) – remember this is an examination to evaluate the adequacy and effectiveness of the policies, controls and procedures adopted by the relevant person to comply with the requirements of these Regulations, and to make recommendations in relation to those policies, controls and procedures, and to monitor the relevant person’s compliance with those recommendations. The SRA would expect a written report on this…
- Policies, Controls and Procedures – a good place to start here is to check when your firm’s Anti-Money Laundering Policy was last updated, why it was updated and whether it was communicated to relevant personnel…
There are other things that could be checked, however in our experience these three fundamentals may not be fully up to date for firms or may not be comprehensive enough.
So if you’re an MLRO or MLCO, you may want to revisit the above quickly, just in case the dreaded “letter” turns up informing you that your firm has been picked for an SRA Desktop Audit….
The cpm21 team can help with your Anti-Money Laundering obligations, so if you would like some help, contact one of our consultants today: -