If you or your firm can no longer comply with certain regulatory requirements, you may be able to apply for a dispensation to continue providing regulated services while the issue is resolved. Read our guidance to understand eligibility and timescales and how to apply.
At a glance
- A temporary dispensation is designed to be used in unplanned scenarios where non-compliance happens inadvertently.
- If granted, a dispensation allows a firm or insolvency practitioner to continue to provide the relevant regulated service, with necessary safeguards, while it takes steps to remedy the non-compliance.
- After the problem has been identified, you must wait until the dispensation has been granted before carrying out the relevant regulated activity.
- Dispensations are not suitable for use during planned restructuring, mergers and acquisitions.
- If the issue is not resolved before the dispensation ends, ICAEW may start the process of deregistration or withdrawal of a licence.
- There is a maximum time period for some dispensations eg, for audit eligibility issues.
- A temporary dispensation is not available for anti-money laundering supervision.
Who can apply for a dispensation?
A regulated firm may apply for a dispensation when it can no longer comply with one or more of the requirements of the:
- Audit Regulations
- Local Audit Regulations
- DPB (Investment Business) Handbook
- Legal Services Regulations
- Licensed Practice Handbook
- An insolvency practitioner (IP) may apply for a dispensation when they cannot comply with one or more of the Insolvency Regulations.
An insolvency practitioner (IP) may apply for a dispensation when they cannot comply with one or more of the Insolvency Regulations.
Who should complete this form:
- The relevant compliance principal for the regulated area where a dispensation is being sought should complete this form.
- If the firm is applying for a dispensation in multiple areas a relevant compliance principal should complete the form.
- If an audit dispensation forms part of the request, the audit compliance principal must make the application.
Applying for a dispensation to use the ‘Chartered Accountants’ description
If your firm has a compliance issue with the Regulations Governing the Use of the Description of Chartered Accountants and ICAEW General Affiliates, you should check if you need to apply for a dispensation and if so, use the ‘Use of the description’ form to do so.
When should you notify ICAEW about a temporary compliance issue?
The firm or IP should notify ICAEW as soon as possible after the situation arises, which means they are no longer able to comply with the relevant regulations or handbook. For audit, local audit and legal services firms, the notification should be made within 10 business days of the situation arising.
What information should you provide in your dispensation application?
The compliance principal or IP will need to explain:
- what has happened and when;
- the steps that will be taken to remedy the position and to ensure future compliance with the requirements; and
- provide details of the safeguards that will be put in place to ensure that no clients or third parties would be adversely affected by a dispensation being granted.
What happens at the end of the dispensation period if the issue is not resolved?
If the firm or IP has not resolved the issue or non-compliance by the date the dispensation ends, and where the dispensation cannot be extended, ICAEW will start the process of deregistration or withdrawal of licence.
Important information for audit firms
Where an audit firm has ceased to meet one or more of the eligibility requirements of regulation 2.02 or 2.03 for more than 90 days, a dispensation cannot be issued. In these circumstances, ICAEW will start the process of deregistration.
The firm must not conduct any statutory audit work until its eligibility status is resolved and specifically it must not sign any audit reports if it has been ineligible for more than 90 days.
Anti-money-laundering (AML) supervision
If ICAEW currently supervises the firm for AML automatically because it is a member firm and the firm does not have a separate AML supervision contract, it should check whether it still meets the member firm definition in ICAEW’s Principal Bye-laws.
Please note that temporary dispensations, allowing a firm to continue to be supervised for AML while a matter is resolved, are not available. If a firm ceases to meet the definition of member-firm, then it will need an AML supervision contract and should contact us as soon as possible to regularise the position.
Apply for a dispensation
Length of time dispensation can be granted by regulated area
| Regulated area | Length of time of dispensation |
| Audit |
*This is a Companies Act requirement and cannot be extended. ** The date the situation first arose, is the date when the firm ceased to meet the eligibility requirements of the Audit Regulations. |
| Local Audit |
**The date the situation first arose is the date when the firm ceased to meet the eligibility requirements of the Audit Regulations. |
| DPB (Investment Business) |
|
| Legal services |
|
| Licensed practice |
|
| Insolvency |
|
Apply for a dispensation
Use this form to apply for a dispensation to continue providing regulated services while your issue is resolved.
Apply now