Accounts rules changes
22 Sep 04
A note of amendments to the Accounts Rules in force from 1 September 2004
The amendments to the Accounts Rules which were approved at the Society’s AGM and passed by the Society’s Council took effect from 1 September 2004. Detailed in the schedule to the amendment rules, the amendments do not change the rules in their entirety. They have the effect:
Amendments 1-3 and 7 change the rules to take account of the Money Laundering Regulations 2003 and the Proceeds of Crime Act 2002.
Amendment 4 co-ordinates rule 6(2) (drawings from client account) with the line taken by the banks to use an account name as the appropriate reference point.
Amendment 5 means that rule 22(1) (prohibition on acting for lender to solicitor or connected persons) now reads: “No solicitor shall, and nor shall that solicitor’s firm or incorporated practice, act for or pursuant to the written requirements of a lender in the constitution, variation, assignation or discharge of a standard security securing a loan which has been advanced or is to be advanced to or has been guaranteed or is to be guaranteed by– (a) the solicitor,… (b) the solicitor’s spouse”.
This means that rule 22 applies in circumstances where the lender may not consider the solicitor to be acting on their behalf but has requested that the solicitor take action for them.
Amendment 6 alters rule 22 at para (4)(b) to simplify the position when dealing with the discharge of a standard security. The previous two-month provision will no longer apply. Rule 22(4) now states: “This Rule shall not apply if– (a) the lender to any of the persons specified in paragraph (1) is the solicitor, or (b) the borrower’s obligations under the standard security have been fully implemented before the solicitor accepts instructions or in any way begins to act in relation to the discharge of such standard security.”
Amendments 8-11 (form of accounts certificate) allow for an additional request for information covering bridging loans on behalf of clients within the accounts certificate.
Additional guidance is available on the Society’s website www.lawscot.org.uk, under “Commonly Used Rules”.