Question of ethics

Q I am instructed by a cash purchaser in a property transaction.

My colleague says that the Money Laundering Regulations do not apply to this type of transaction, is he right?A The current Money Laundering Regulations 1993 apply to solicitors who conduct investment business as defined under the Financial Services Act 1986 and may apply to solicitors who undertake any of the activities set out in the schedule to the regulations.

Conveyancing does not constitute investment business as defined in the Act and is not therefore caught by the regulations.

However, the substantive law on money laundering will apply.

Following the requirements under the regulations could help to show that you have behaved reasonably.

The position is expected to change when effect is given to the second Money Laundering Directive which will bring new areas of work under the regulations, including conveyancing.

A comprehensive information booklet on money laundering is available from Professional Ethics.Please noteLimited liability partnerships (LLPs)The legislative changes which provide for LLPs came into force on 6 April 2001.

For practitioners to 'convert' to LLP status, the process will involve two successive steps - registration as an LLP at Companies House followed by recognition as a recognised body by the Law Society under the new Solicitors Incorporated Practice Rules 2001.

These rules also came into force on 6 April 2001 and now regulate all incorporated practices, whether companies or LLPs.

An information pack including the new rules is available from professional ethics.

l Question of ethics is compiled by the Law Society's professional ethics guidance team.

Send questions for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch;tel: 020 7242 1222.