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LPFF: Compulsory automation of trust interest receipts
- 28 July 2025
- Legal and Compliance
- South African Accounting Academy
Summary:
The Legal Practitioners’ Fidelity Fund (LPFF) has released a key communication on trust interest receipts regarding an amended rule that takes effect on 1 September 2025.
Article:
This is an Important Communication regarding the Compulsory automation of trust interest receipts as per amended rule 54.14.16 of the Legal Practice Council (LPC).
The amended Rule 54.14.16 mandates that all interest accrued on Section 86 of the Legal Practice Act (LPA) trust banking accounts (as referred to in section 86(5)) must be transferred by the trust account practice's bank to the LPFF within 5 working days after the end of the calendar month in which the interest vested in the LPFF using the Automated Monthly Transfer Systems (AMTS).
From 1 September 2025, all interest, accrued interest that vests with the Fund, will be swept by each of the banks that have entered into a banking arrangement with the LPFF as provided by Section 63(1)(g) of the LPA.
Legal practitioners with Section 86 trust accounts that are not yet integrated into the banks' AMTS should coordinate with their respective banks to ensure compliance with amended Rule 54.14.16.
Annexure A provides practical application of the amended rule.
Click here to access the gazetted notice on the amendment to rule 54.14.16:
Click here to download the 3-page communication document:
Relevance to Auditors, Independent Reviewers & Accountants:
- The Legal Practitioners Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor and independent reviewer, you need to consider and assess compliance with the LPA and Guidance documents issued by the LPFF.
- You should be aware of the latest updates published for information purposes, by e.g. the LPFF.
- As an accountant, you may need to advise your clients who are legal practitioners on compliance with the LPA and adherence to the latest guidelines issued by the LPFF.
Relevance to Your clients:
- A legal practitioner has a duty to comply with the Legal Practitioners Act.
- Your clients who are legal practitioners, must not only comply with the LPA, but they also have to adhere to the latest guidance documents issued by the LPFF.
- Your clients who are legal practitioners, should be aware of the latest updates published for information purposes, by e.g. the LPFF.