Friday's fun compliance question

  1. An individual solicitor or SRA authorised trustco is sole trustee of trust X
  2. The trustee opens a cash account in the sole name of trust X with e.g. Metro Bank for cash which will not be invested.

On what basis would you consider that, while it may be client money, this is not a client account under SAR and so not subject to the rules governing client accounts (reconciliations etc)? You may of course disagree with the question!

(I am thinking it is one of the exceptions under r2.3:
SRA | Accounts Rules | Solicitors Regulation Authority)

I am interested by this, because my business is regulated by the FCA, and the rules regarding Client Money are considerably lengthier and more involved.

However, my hasty review of SAR suggests that the only person who could act as the Client in this case is the Solicitor or SAR Authorised Trustco, and it seems inappropriate for that individual or Trustco to make its own decision in this matter.

Unless this sum of money solely represents fees due to the solicitor or legal aid payments due to the solicitor, it has to be client money and treated as such, surely? And while it is client money, all the relevant rules apply.