Designated professional body
Financial services (or investment business) can be a bit of a minefield. The Financial Services and Markets Act 2000 (FSMA) allows firms to conduct investment business, only if they are regulated by either:
- The Financial Conduct Authority (FCA) or they become an appointed representative of another FCA firm.
- A Designated Professional Body (DPB) such as ICAS, under Part XX of the Act.
Firms cannot be licensed by a DPB and authorised by the FCA.
The DPB status allows ICAS to license accountancy firms to carry out certain restricted 'exempt regulated activities' without the need to be authorised by the Financial Conduct Authority (FCA). Examples include advising on private company shares, commenting on advice given to a client by an authorised third party or attending meetings between the client and the third party. However what a DPB licensed firm can and can't do can be complicated and you are advised to read on.
If a member performed these activities without a licence from ICAS, or authorisation from the FCA, they would be in breach of FSMA.
Do I need a DPB licence?
ICAS is able to licence you as an 'exempt professional firm' under our DPB regime if you conduct only restricted investment business which is incidental, complimentary and arising out of the firm's professional services.
These restricted activities are called 'exempt regulated activities'. Examples include advising on private company shares, commenting on advice given to a client by an authorised third party or attending meetings between the client and the third party. The DPB Handbook provides guidance:
- Schedule 2 to the DPB Handbook: outlines the activities that a DPB licensed firm can undertake.
- Schedule 3: outlines what 'incidental' means
- Schedule 4: outlines what activities are not regulated and can be conducted by any firm.
Do I need a FCA authorisation?
If you are conducting 'mainstream' investment business activities on a non-incidental basis, such as advising on particular insurance contracts or pensions; advising on particular mortgages, or approving financial promotions, then you can only do so with a financial services authorisation from the Financial Conduct Authority .
Schedule 1 to the DPB Handbook: outlines the list of activities that only FCA authorised firms can conduct. The DPB helpsheet mentioned PDF [210 KB] above also provides advice on this.
What do I do if I require a DPB licence?
If your firm wants to become DPB Licensed you will need to:
- Submit a DPB Application Form
- Submit a DPB Affiliate Application Form for each Affiliate in your firm (see below)
- Pay an annual DPB licence fee (to be advised by ICAS);
- Have appropriate Professional Indemnity Insurance in place.
If any principals are not members of ICAS (or certain other Designated Professional Bodies, see the application form), they will have to become Designated Professional Body (DPB) Affiliates. Please fill in and return (with your DPB licence application form), a DPB Affiliate application form for each principal who needs to become a DPB Affiliate.
All applications should be sent to Regulatory Authorisations on 0131 347 0286 or email@example.com.
We will endeavour to process your application within two weeks. If you wish to know the status of your application please contact us, and we can update you on progress.
The DPB Handbook
The handbook provides full details of ICAS' licensing arrangements.
- Download DPB Handbook (effective from 1 October 2018)
- Download DPB Handbook Amendments (effective from 1 April 2013)
- Download Guidance for Investment Business Referral by Members PDF [143 KB]
What happens once my firm is licensed?
The ICAS team will aim to process your application within two weeks of receiving your forms. Please note that each application requires to go through a detailed checking process.
There is no automatic approval of any application, given the public interest nature of the applications, and you will be notified when a decision has been made regarding your application.
However, you should note that if you have not provided all the information required this could delay your application being processed. We will contact you to request this information. We will let you know how this affects your application timescales.
Once you are licensed there are a number of obligations that you will need to fulfil. We are here to help, so please contact us if you would like advice or support. Your firm will need to meet the following:
- Comply with the DPB Handbook PDF [979 KB] (effective from 1 April 2013)
- Notify ICAS within ten days of any changes in the firm.
- Continue to comply with the professional indemnity insurance requirements
- Complete the DPB section of the Firms Annual Return each year;
- Be monitored by ICAS as part of the Practice Monitoring regime.
The EU Service Directive and The Provision of Services Regulations
In accordance with the requirements of the EU Service Directive, which was brought into UK law by The Provision of Services Regulations 2009, information is available about the rules, regulations and formalities that apply to service activities in other EU countries.
If you need any further guidance on the above, please email firstname.lastname@example.org or phone 0131 347 0286.