On 28 October 2026, the Legal Services Board (LSB) formally approved the Solicitors Regulation Authority’s (SRA) updated enforcement guidance, bringing into operational effect the SRA’s statutory powers to issue unlimited financial penalties for economic crime and financial misconduct without requiring referral to the Solicitors Disciplinary Tribunal (SDT).
Statutory framework under ECCTA 2023
Enacted under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), this milestone reform fundamentally alters disciplinary enforcement across the legal sector in England and Wales:
- Unlimited direct fines: The previous statutory fining threshold for traditional law firms has been eliminated for offenses involving economic crime, including money laundering, fraud, sanctions violations, and terrorist financing failures.
- Direct regulatory enforcement: The SRA can now adjudicate and impose substantial punitive fines directly, expediting enforcement actions that previously required protracted hearings before the SDT.
- Firm turnover correlation: For corporate law firms and ABS entities, potential financial penalties will be calculated based on firm turnover, ensuring that deterrence is proportionate to the scale of large commercial practices.
- Enhanced proactive audits: The regulator will step up targeted AML inspections and thematic reviews across high-risk practice areas, including commercial conveyancing, trust formation, and wealth management.
Practical implications for legal practitioners
Solicitors and compliance officers for legal practice (COLPs) must immediately review internal controls:
- Source of funds verification: Strengthening customer due diligence (CDD) and independent source of wealth checks.
- Sanctions screening systems: Maintaining automated, real-time sanctions screening protocols against international registries.
- Mandatory AML training: Ensuring all fee earners and support staff complete updated anti-money laundering compliance certifications.