Latest from RACO: What We’ve Published This Month
It has been a busy few weeks for regulatory developments, and we have been covering them as they land on our news and insights page. Here is a summary of the most recent articles, each with a link to read the articles in full.
COLP and COFA Split: Growing Pushback, But Preparation Should Continue
The LSB has approved the new rules separating COLP and COFA from unilateral decision-makers, but opposition from smaller practices is growing. A newly formed SME & Boutique Law Firm Alliance has written to the SRA requesting a postponement and a rethink of the £600,000 turnover threshold. Our view: the split may face scrutiny, but the wider programme of client account reform will hold. Firms should keep preparing. Read the full article here: COLP and COFA Split Pushback Growing, But Firms Should Still Prepare.
AML, Accounts and Cooperation Failures: Lessons from Recent SRA Enforcement Cases
We examined recent SRA decisions, including personal fines of up to £20,920, covering failures in client and matter risk assessment records, firm-wide risk assessments treated as reckless, and a cooperation failure case. The common thread: the SRA’s Proactive Supervision team is still working through firms methodically, and the failures it finds are ones that should have been caught internally. Read the article here: AML, Accounts and Cooperation Failures – Lessons from Recent SRA Enforcement Cases.
COLP and COFA Changes Approved: Practical Guidance on What Your Firm Needs to Do
Our detailed guidance on the new COLP and COFA rules: which firms are affected, what “unilateral” actually means, and the practical steps to take now, including the FA2 application process and timelines. This guidance is still worth a read, despite the ongoing pushback from legal practices: COLP and COFA Changes Approved: Practical Guidance on What Your Firm Needs to Do.
Employment Law Changes Taking Effect in October 2026
The second phase of the Employment Rights Act 2025 arrives in October, with the “all reasonable steps” harassment duty, third-party harassment liability, longer tribunal time limits, and trade union notice requirements. We explain what your firm needs to have in place before the changes take effect. Read the full article here: Employment Law Changes Taking Effect in October 2026: What Your Firm Needs to Do Now.
Crypto Assets and the SRA’s Sectoral Risk Assessment
The SRA classifies crypto as an established transaction risk, singling out stablecoins and NFTs. We explain what this means for source of funds enquiries and why a bank statement showing converted crypto proceeds is not enough. Crypto Assets and the SRA’s Sectoral Risk Assessment: Transaction Risks Firms Must Consider.
The SRA Warning Notice on Misuse of AI
The SRA published a formal warning notice on 17 August targeting AI hallucinations and client confidentiality breaches. We break down the cases behind it, the Code paragraphs it relies on, and what every firm should have in place. Read the full article here: The SRA Warning Notice on Misuse of AI – What Every Firm Must Do.
Domestic PEPs: Why ‘Lower Risk’ Still Means Real Checks
The domestic PEP lower-risk starting point is a calibration, not an exemption. Senior management approval, source of funds and wealth enquiries, and enhanced monitoring all still apply. We explain where firms go wrong. Read the full article here: Domestic PEPs: Why ‘Lower Risk’ Still Means Real Checks.
SRA Highlights Cyber Crime and AI in Latest Risk Assessment
The SRA’s updated Sectoral Risk Assessment flags AI-enabled fraud and cyber-enabled crime as current risks. We explain why your firm-wide risk assessment needs to address them and why Cyber Essentials certification matters more than ever. Read the full article: SRA Highlights Cyber Crime and AI In Latest Risk Assessment – What Firms Need to Do.
Free Webinar Next Week: SRA Compliance & AML Update 2026
There has been a lot to keep up with this year. The MLR 2026 amendments, the SRA’s updated Sectoral Risk Assessment, the AI warning notice, the COLP and COFA changes and the October employment law reforms are all landing within months of each other, and each one has practical implications for how your firm manages compliance.
David Green, Managing Director of RACO, is hosting a free webinar in which he will work through the key compliance areas regulated law firms and legal practitioners should be reviewing right now, including common weaknesses identified through our compliance audits and file reviews. The session, ‘SRA Compliance & AML Update 2026’, is designed to give you practical points you can take back to your firm and use immediately.
What the session will cover:
During the session, we’ll explore:
- SRA compliance expectations for 2026
- Common compliance issues identified in law firms
- AML, sanctions and firm-wide risk assessment requirements
- Policies, Controls and Procedures (PCPs) – what firms must maintain
- Regulation 18 risk assessments and ongoing monitoring
- Staff training and competence requirements
- Compliance audits and evidence of implementation
- Preparing for insurer and regulatory scrutiny
- Practical steps to strengthen your compliance framework
The focus throughout will be on what these requirements mean in practice, and the steps firms can take to identify and address potential gaps.
Who should attend: Managing Partners, Directors, Practice Managers, COLPs, COFAs, MLROs, MLCOs, and anyone responsible for compliance, risk or firm management. Suitable for firms of all sizes.
Every attendee receives:
- A Compliance Health Checklist to review your firm’s SRA and AML arrangements
- A “What Should Be Reported to the COFA?” Checklist to support consistent internal reporting
- A live Q&A session with David Green
Places are free, but registration is required.
Book Now for Next Week’s Free Webinar – SRA Compliance & AML Update 2026: What every law firm should have in place
If your firm is reviewing its compliance arrangements, or if you want to check whether the areas above are covered, the ‘SRA Compliance & AML Update 2026’ webinar on 23 September is the best place to start. David will cover the key compliance areas regulated law firms should be reviewing in 2026, you’ll leave with practical points you can take back to your firm and use to review your current compliance arrangements.
