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GLOSSARY

Interest policy definition

Published by a LexisNexis Practice Compliance expert

What does Interest policy mean?

In accordance with the sra accounts rules 2011, all firms must have an interest policy which provides for the payment of interest to a client when it is fair and reasonable to do so.

This policy must be in writing and brought to the client's attention at the outset of the matter.

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Payment of interest—regulatory requirements 2011 [Archived]

This Practice Note explains the SRA Accounts Rules requirements (rules 22 to 25) regarding interest on monies held in a client account.SRA Accounts Rules 2011Until 6 October 2011 the SRA Accounts Rules prescribed how firms should account to their clients and other third parties for interest on the money that was held on their behalf.From 6 October this changed. Although the SRA AR 2011 are almost entirely prescriptive, payment of interest is one area where the SRA has moved to an outcome-focused approach.The SRA AR 2011 make no distinction between interest earned on money held in a general client account and a separate designated client account (SDCA). This aligns the SRA AR 2011 with the Legal Services Act 2007.The previous prescriptive interest rules have been replaced with three basic requirements:• pay interest when it is fair and reasonable to do so in all the circumstances• pay a fair and reasonable sum over the whole period that the money is held• act fairly and provide sufficient information at the outset to...

Managing conflicts of interest in pensions

Managing conflicts of interest in pensions THIS PRACTICE NOTE APPLIES TO TRUST-BASED OCCUPATIONAL PENSION SCHEMES Legal requirements in relation to conflicts of interest Pension scheme trustees have a duty to act in the best interests of the scheme's beneficiaries. However, trustees may owe duties to other parties or have personal interests which conflict with that duty. It is a general principle of trust law that trustees should not put themselves in a position where their duty to act in the best interests of beneficiaries conflicts with duties that they owe to other parties or with their personal interests. If trustees make decisions while subject to a conflict of interest that has not been appropriately managed, there is a risk that those decisions may be challenged by scheme members or overturned by the courts. It is important that the members of a scheme should perceive a conflict or potential conflict as having been properly managed. The directors of a company that acts as a trustee of a...

Discover our 2 Practice Notes on Interest policy

Interest policy—law firms

Interest policy—law firms 1 Amount of interest We will pay a fair sum of interest to clients or third parties on any client money we hold on their behalf. 2 Circumstances in which interest will not be paid We will not pay interest: 2.1 on money we are instructed to hold outside a client account in a way that does not attract interest, eg cash held in our safe; 2.2 where the amount of interest, calculated in accordance with this policy, is less than £[30][—on the basis that the costs associated with paying that interest are disproportionate to the amount involved]; 2.3 where we come to a different arrangement, in writing, with the client or third party for whom the money is held—where we do so, we will provide sufficient information to enable the client or third party to give informed consent (see ‘Contracting out’ at section 9 below); 2.4 [on money held for the Legal Aid Agency] 2.5 [[insert other]] 3 Different types of client account 3.1...

Terms of business—law firms

Terms of business—law firms 1 Our contract with you 1.1 These Terms of Business (as updated from time to time) apply to all work we do on your behalf. It is an important document—please read and keep it in a safe place for future reference. 1.2 Each time you instruct us on a new matter we will send you a letter confirming your instructions and setting out the scope of the work we will carry out for you, our fees and individual contact details. This is called the Engagement Letter. These Terms of Business should be read together with the Engagement Letter—together they form the contract between us. 1.3 If there is any inconsistency between our Terms of Business and the Engagement Letter, the Engagement Letter will take priority. 1.4 [Although your continuing instructions in this matter will amount to your acceptance of these Terms of Business, we ask that you sign, date and return one copy for our file. OR Your continuing instructions in this matter...

Dive into our 2 Precedents related to Interest policy

Sustainable finance and ESG monthly round–up—30 April 2025

This edition of the Sustainable finance and ESG monthly round-up from the Finance Group includes: (1) IFRS Foundation and TNFD sign MoU to enhance nature-related financial disclosures in capital markets, (2) IFRS Foundation announces ISSB's proposed amendments to IFRS S2 on greenhouse gas emissions disclosures and (3) LMA publishes updated green, social and sustainability-linked loan principles.