This section explains what regulated investment business is, who is regulated, and how firms apply for FSA authorisation or a DPB Licence.
- DPB Handbook
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The Designated Professional Body (DPB) Handbook provides full details of ICAEW’s licensing arrangements.
In addition to the current handbook, you can see changes made since 2004 and download an order form for a printed copy.
- What is regulated investment business?
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Three pieces of legislation:
- the Financial Services and Markets Act 2000;
- the Regulated Activities Order (Statutory Instrument 2001, No. 544) as amended; and
- the Non-Exempt Activities Order (Statutory Instrument 2001, No. 1227) as amended
determine whether - for the purpose of each investment activity undertaken - a firm needs to be authorised by:
- the Financial Services Authority (FSA);
- a designated professional body (DPB); or whether
- no authorisation or licence is necessary.
In order to conduct 'mainstream' investment business - for example, if your firm recommends the purchase of specific investments (eg, pensions, listed company shares) or approves financial promotions, - the firm needs to be authorised by the Financial Services Authority (FSA).
In order to conduct 'non-mainstream' investment business - for example, if your firm advises on private company shares, interprets advice given to a client by an authorised person or takes part in discussions with a client and an authorised person - the firm needs to be licensed by ICAEW.
If a firm has no authorisation or licence, the firm may not undertake any regulated investment business.
Investment business also includes advice on mortgages and general insurance. For further information on the types of investment and types of activity that are regulated, see Is it investment business?.
- Who is regulated - the firm or the individual?
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It is the firm that is either authorised by the FSA or licensed by ICAEW - depending on the activities undertaken. In addition, the FSA only allows certain activities to be undertaken by specifically qualified individuals. In DPB licensed firms, the work must be undertaken by someone who is competent in this area.
- How does the firm apply for FSA authorisation?
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For information on FSA authorisation, visit www.fsa.gov.uk.
- How does the firm apply for a DPB licence?
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If your firm wishes to conduct designated professional body activities, it must have a licence from ICAEW.
You must:
- fill in an application form
- satisfy ICAEW's Investment Business Committee that the firm meets the criteria to carry out investment business work
- pay an annual DPB licence fee
- comply with the Designated Professional Body Handbook
- comply with the Professional Indemnity Insurance Regulations and possibly have the enhanced levels of PII for general insurance business
- be monitored by ICAEW.
If any principals are not members of ICAEW (or certain other 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 such partner who needs to become a DPB affiliate.
Application forms
Please refer to these notes as you fill in the form so that you give us all the information we need.
Fees
Please fill in the relevant forms and return these, together with a cheque payable to Chartac for the relevant fees, to:
Regulatory Support Section
ICAEW
Metropolitan House
321 Avebury Boulevard
Milton Keynes
MK9 2FZ
If you have any questions as you are filling in the forms, please contact us on +44 (0) 1908 546 302, or email regulatory.support@icaew.com.
- DPB annual return and monitoring
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All firms licensed by ICAEW to undertake exempt-regulated investment business are required to complete an annual return.
The Quality Assurance Department (QAD) carries out DPB monitoring visits to firms licensed by ICAEW to undertake exempt-regulated activities under the DPB arrangements.
Firms licensed for DPB activities normally receive a combined PA and DPB visit including a review of compliance with the DPB Handbook and a review of how the firm meets the principles-based Practice Assurance standards
The QAD reports its findings to the Investment Business Committee.
- Becoming an appointed representative of an FSA authorised firm?
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Firms may wish to consider becoming an appointed representative of an FSA authorised firm for all or certain types of investment business. This route is open to all firms, including those which hold a licence from ICAEW under the Designated Professional Body arrangements.
Under the terms of ICAEW's Code of Ethics, however, a member should consider ‘whether the status of the third party investment business provider is compatible with the requirement to give objective advice’ (section 241, Agencies and referrals).
This means that a professional firm can only become an appointed representative of an independent financial adviser or a ‘whole of market’ firm and this applies for all financial services business, including general insurance and advice on mortgages.
- Further information
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- What does DPB mean for me? Watch our 20-minute DPB webinar
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We prepared this webinar for firms who want to find out whether they need a DPB licence. If you're already licensed and want a refresher on the various regulations you have to comply with, you’re bound to find it helpful.
In addition to watching the webinar (you can download it to your computer by right-clicking the link and selecting ‘Save target as…'), you can download the webinar slides for reference. For best results, we recommend you watch the webinar on a Windows PC and not an Apple Mac.