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What is the difference between DPB regulation and FCA regulation?
Category: ICAEW & RQ
The key difference is that FCA (Financial Conduct Authority) regulation is direct authorisation for firms whose primary business is financial services, while DPB (Designated Professional Body) regulation is an alternative route for professional services firms. <strong>The DPB exemption:</strong> Under the Financial Services and Markets Act 2000, ICAEW is a Designated Professional Body. This enables member firms to carry out certain regulated activities without needing direct FCA authorisation, provided those activities are <strong>incidental to and arising out of</strong> the firm's main professional services. <strong>Key requirements for the DPB route:</strong> <ul> <li>The investment business must be secondary to your main accountancy work</li> <li>Activities must be conducted in accordance with the ICAEW DPB Handbook</li> <li>You must hold a valid DPB licence from ICAEW</li> <li>Your firm cannot be both DPB-licensed and FCA-authorised simultaneously</li> </ul> <strong>When FCA authorisation is required instead:</strong> If your investment activities are not incidental to professional services, or if you wish to conduct activities prohibited under the DPB regime (listed in Schedule 1 of Part 3 of the DPB Handbook), you must apply directly to the FCA. DPB regulation is generally less burdensome than full FCA authorisation but still requires robust compliance with the DPB Handbook, including rules on conduct, competence, and client money handling.