Designated Professional Body (Investment Business) licence
***Quality Assurance monitoring reviews: Coronavirus update.*** Following recent government guidance, we will not be carrying out any onsite monitoring reviews for the foreseeable future. If your firm is scheduled to have an onsite review, one of our reviewers will be in touch two weeks before the scheduled review date to explore whether we can perform the monitoring review remotely. If you need to postpone your review because your business has been affected by Coronavirus, please email QADvisits@icaew.comFind out how you can enhance the services you already offer your clients with a Designated Professional Body (Investment Business) licence. This section explains what regulated investment business is, who is regulated, and how your firm can apply for a DPB (Investment Business) licence.
What is regulated investment business?
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 Conduct Authority (previously the Financial Services Authority);
- 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 Conduct Authority (previously the Financial Services Authority).
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?
It is the firm that is either authorised by the FCA (previously the FSA) or licensed by ICAEW - depending on the activities undertaken. In addition, the FCA only allows certain activities to be undertaken by specifically qualified individuals. In DPB (Investment Business) licensed firms, the work must be undertaken by someone who is competent in this area.
DPB (Investment Business) Handbook
The DPB (Investment Business) Handbook provides full details of our licensing arrangements.
How to apply for a DPB (Investment Business) licence
If your firm wishes to conduct DPB (Investment Business) activities, it must have a licence from ICAEW.
- 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 (Investment Business) licence fee
- comply with the DPB (Investment Business) Handbook
- comply with the Professional Indemnity Insurance Regulations and possibly have the enhanced levels of PII for general insurance business and
- 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 DPB (Investment Business) affiliates. Please fill in and return (with your DPB (Investment Business) licence application form), a DPB (Investment Business) affiliate application form for each such partner who needs to become a DPB (Investment Business) affiliate.
Due to the coronavirus outbreak our offices are currently closed. Any postal applications are likely to be significantly delayed. Please instead email your form(s) to email@example.com. If any payments are due, an adviser will then contact you to arrange payment.
DPB (Investment Business) licence for firmsPlease refer to the guidance as you fill in the form so that you give us all the information we need.
DPB (Investment Business) affiliate
Individuals or corporate bodies that are principals in an ICAEW firm licensed by ICAEW under the designated professional body DPB (Investment Business) arrangement, but who are not members of ICAEW are required to apply for DPB (Investment Business) affiliate status. Members of ICAS, CAI, ACCA, the Law Society of England & Wales, the Law Society of Scotland, the Law Society of Northern Ireland or the Institute of Actuaries do not need to become DPB (Investment Business) affiliates.
DPB (Investment Business) licence fees
Access information about ICAEW fees, and the fees we collect on behalf of other organisations, including information on how to pay them. There is also a useful FAQs page.
DPB (Investment Business) updates
DPB (Investment Business) resources and helpsheets
- An introduction to DPB: An introduction to the ICAEW DPB (Investment Business) licence. This webinar explains the areas of investment business activity a licensed firm can be involved in and the eligibility criteria for the licence.
- DPB compliance review: Guidance for ICAEW DPB licensed firms on the key components of an annual DPB compliance review, including client file reviews.
- Insurance distribution: An introduction to insurance distribution using the DPB (Investment Business) licence. This webinar explains the types of insurance that DPB licensed firms may be able to arrange for their accountancy clients, and the information you must give to clients about the insurance. We also explain the circumstances where a firm will need FCA authorisation due to restrictions on what a DPB licensed firm can do.
DPB (Investment Business) annual return and monitoring
All firms licensed by ICAEW to undertake exempt-regulated investment business (DPB (Investment Business) activities) are required to complete an annual return online. ICAEW carries out DPB (Investment Business) monitoring visits to firms licensed by ICAEW to undertake exempt-regulated activities under the DPB (Investment Business) arrangements.
Firms licensed for DPB (Investment Business) activities usually receive a combined Practice Assurance and DPB (Investment Business) visit including a review of compliance with the DPB (Investment Business) Handbook and a review of how the firm meets the principles-based Practice Assurance standards. The results of monitoring visits are reported to the Investment Business Committee.
Prepare for your firm's next monitoring visit, the Guide to monitoring reviews for DPB (Investment Business) licensed firms is full of practical information on the areas we often find firms need clarity about during our quality assurance monitoring reviews. It covers topics such as the basics of compliance, introductions to financial advisers, which insurance distribution activities can and cannot be offered and guidelines on commenting on financial advice. The format of this guide allows you to work through the potential issues your firm might come across and to create an action plan for each of these.
Changes in firm structure – please tell us within 10 business days
It’s important to maintain your firm record accurately. An inaccurate or out of date firm record may constitute a misdescription of your firm. It could also lead to regulatory or disciplinary action.
DPB (Investment Business) firms and consumer credit
ICAEW has arrangements in place which enable firms to provide consumer credit services without the need for authorisation from the Financial Conduct Authority (FCA).
There’s no application to complete and no fee to pay. If firms meet the eligibility criteria, then such activities can be undertaken, provided that they are undertaken as set out in the DPB (Consumer Credit) Handbook.
As these arrangements are made under Part XX of Financial Services and Markets Act 2000 (FSMA), the service may only be provided in a manner incidental to the activity of the firm generally, and which arises out of, or is complementary to, another professional service, which is not itself a regulated activity, provided to a specific consumer client (as with investment business).
Under the DPB (Consumer Credit) Handbook, a DPB licensed firm is eligible to use these arrangements, as are firms that are:
- audit registered under the Audit Regulations; or
- authorised under the ICAEW’s Probate Regulations
- a member engaged in public practice as a sole practitioner; or
- a partnership engaged in public practice of which more than 50 per cent or more of the rights to vote on all, or substantially all, matters of substance at meetings of the partnership are held directly by members; or
- a limited liability partnership engaged in public practice of which more than 50 per cent or more of the rights to vote on all, or substantially all, matters of substance at meetings of the partnership are held directly by members; or
- any body corporate (other than a limited liability partnership) engaged in public practice of which:
- 50 per cent or more of the directors are members;
- more than 50 per cent of the nominal value of the voting shares is held directly by members; and
- more than 50 per cent or more of the aggregate in nominal value of the voting and non-voting shares is held directly by members.
However, a firm that is FCA authorised will not be eligible under the new DPB (Consumer Credit) Handbook as the new Handbook utilises Part XX of FSMA and is therefore a form of exemption from FCA authorisation.
There is more information available at icaew.com/ccl
DPB firms that previously held a standard consumer credit licence from the OFT
By virtue of a statutory instrument issued on 27 March 2014 (The Financial Services and Markets Act 2000 (Consumer Credit) (Transitional Provisions) (No. 2) Order 2014), a firm with a DPB licence - that before 1 April 2014 held an OFT standard licence and after that date has interim permission to undertake credit-related regulated activities - could continue to use the DPB exemption, for a transitional period, for other exempt regulated activities. This transitional period ends when the firm is notified by the FCA that it has ‘full’ permission. At that point, the firm will no longer be eligible to hold a DPB licence and will have to cease the investment and other activities permitted by the DPB Handbook, because a firm cannot be both exempt and FCA authorised. If the firm wishes to continue to undertake these other activities (after receiving full FCA permission for credit-related regulated activities), the firm will need to apply to the FCA for permission to undertake such activities.
- withdraw from FCA interim or full permission for undertaking credit-related regulated activities and undertake such of those activities that are permitted under the DPB (Consumer Credit) Handbook and continue with the other DPB investment business activities that they undertake; or
- seek additional authorisation from the FCA to undertake those investment business activities that were undertaken under the DPB licensing arrangements.
If you’re managing a practice, you need to comply with regulations covering areas such as PII, clients’ money and anti-money laundering. Find out more.
ICAEW regulation and the ICAEW Regulatory Board
How to become an appointed representative of an FCA authorised firm
Firms may wish to consider becoming an appointed representative of an FCA authorised firm for all or certain types of investment business. This route is open to all firms, including those that 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.
For information on FCA authorisation, visit www.fca.org.uk.
Application for voluntary withdrawal
- If you wish to withdraw from this regulated service currently held with ICAEW, complete the online form.