Law Society strongly opposes government’s anti-money laundering reforms

News

The Law Society of England and Wales has today (17 December) opposed the creation of a Single Professional Services Supervisor (SPSS).

In its response to the UK government’s consultation on proposals to reform of the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) supervision regime, the Law Society raised concerns which include:

• The introduction of the SPSS model poses major operational and strategic risks for the profession while offering no proven benefits. It currently fails to resolve fundamental challenges created by dual regulation.
• Avoiding unnecessary cost and additional regulatory burden as supervision shifts from the Solicitors Regulation Authority (SRA) to the Financial Conduct Authority (FCA). Any changes must be grounded in proportionate, risk-based oversight that reflects the realities of legal practice. The proposals currently do not demonstrate how this will be achieved.

Law Society president, Mark Evans, said: “The AML reforms risk greater fragmentation, not simplification, and fly in the face of the government’s own growth agenda.

“The speed at which the government is consulting on the reforms is a concern, as these changes will fundamentally reshape AML/CTF oversight across all sectors.

“We remain committed to working with the Treasury to deliver effective, proportionate and sustainable reform. However, meaningful reform cannot be achieved through undue haste. Careful consideration is essential to ensure both the integrity of legal sector supervision and the smooth implementation of any changes.”

The Law Society has highlighted safeguards that must be addressed:

• FCA information-sharing powers must protect client confidentiality, avoid duplication, and be supported by clear, sector-specific guidance. This is important in relation to compromising and weakening the confidentiality and integrity of Suspicious Activity Reports and whistleblowing protections.
• Preventing duplicate oversight, as the persistent issues arising from overlapping disciplinary powers are not addressed in this consultation.
• Transition arrangements must include grandfathering, phased implementation and close coordination between the FCA, SRA and Treasury.

Mark Evans concluded: “The AML proposals currently fall short and risk adding complexity without delivering meaningful reform. We urge the Treasury to consider whether a further period of consultation is warranted allowing supervisors, professional bodies and practitioners to contribute before any final decision is made.”

Notes to editors

• Read HM Treasury’s Anti-money laundering and counter-terrorist financing supervision reform: duties, powers, and accountability consultation
• The Law Society’s consultation response is available upon request.