The transition to the FCA as the Single Professional Services Supervisor marks the end of “tick-box” compliance for the legal sector. As the regulator moves from a periodic review model to a proactive, data-led enforcement stance, many firms are discovering that their historic SRA standards may no longer pass muster.
The primary difference? The FCA isn’t just looking for your policies—they are looking for operational proof that those policies are working.
Transition Checklist: Assessing Your Audit Readiness
Use the following comparison to determine if your firm is still operating under the “Historic Standard” or if you are truly “FCA AML Audit-Ready.”
| Area of Focus | SRA “Standard” (Historic) | FCA “Audit-Ready” (2026) |
| AML Policy | A written policy exists and is updated annually. | Policy is mapped to live operational workflows with verifiable proof of staff adherence. |
| Risk Assessments | The FWRA is a static document; CMRAs are completed once at onboarding. | Client Matter Risk assessments are dynamic, updated throughout the matter, and backed by transaction data. |
| Transaction Monitoring | A reactive check performed only when obvious “red flags” appear. | Proactive, calibrated monitoring with clear logs of why alerts were cleared or escalated. |
| Governance | An annual MLRO report is filed and noted in board minutes. | Active “decision logs” showing evidence of board-level challenge and oversight of AML controls. |
| Record Keeping | Compliance documents are saved inconsistently within matter files. | A central, searchable audit trail allowing for rapid evidence production during a review. |
The Window for Action
This transition is not a future milestone. It is an active operational process. The FCA’s arrival brings more than just a new logo; it brings the risk of Section 166 “Skilled Person” Reviews, where firms are mandated to pay for independent audits if their internal controls are found wanting.
Firms that wait for their first FCA interaction to test their evidence trails risk heavy costs, intrusive oversight, and significant reputational damage.
Is your firm ready for the shift?