The rules that dictate when ICAEW members need a Practising Certificate (PC) are due to change from next year to explain the position for members who are principals in financial services regulated firms. 

The changes to the Statement on Members Engaging in Public Practice will come into effect on 1 January 2025 and now make specific reference to the financial services regulators in the Crown Dependencies.

The changes clarify that ICAEW members who are principals in firms regulated by the Jersey Financial Services Commission, the Guernsey Financial Services Commission and the Isle of Man Financial Services Authority are treated the same as members who are principals in firms regulated by the Financial Conduct Authority and Prudential Regulation Authority. 

ICAEW members who are principals in financial services regulated firms must hold a PC if the firm also provides accountancy services, other than incidentally. This is the case regardless of whether the firm is in the Crown Dependencies or mainland UK.

You do not require a PC if you are a principal in a firm that provides accountancy services that are incidental to core business services, which are not accountancy or related services. The revised Statement also provides further clarification on the criteria used to evaluate whether accountancy services are provided in an incidental manner: 

• The accountancy services are incidental, complementary to, integral to, and arising out of the core services being provided which are not, themselves, accountancy services; and
• The accountancy services should not result in a separate income stream nor be charged to clients separately from the non-accountancy core services being provided; and
• The firm does not market itself or hold itself out as an accountancy practice, and accountancy services are not marketed as a separate service; and
• The volume and incidence of accountancy services is not substantial.

This can be a complex area and, if in doubt, members should consult the ICAEW Technical Advisory Services team for support in reaching a conclusion by calling +44 (0)1908 248 250.

There is an amnesty in place until 31 March 2025, meaning that members who don’t currently hold a PC have until 31 March 2025 to obtain one without the failure to hold a PC being treated as a disciplinary matter.

Any member with a PC will also need to comply with ICAEW’s Professional Indemnity Insurance (PII) Regulations. If the member’s firm already holds PII that complies with the requirements of the firm’s financial services regulator, the firm can apply to ICAEW for a dispensation using a dedicated application form and via a fast-track process whereby most applications can be dealt with by ICAEW staff rather than needing to be considered by the PII Committee. 

If members have queries about the PII dispensation process they can contact pii@icaew.com.

Holding a PC brings a member within scope of the ICAEW Practice Assurance Regulations and practice assurance scheme. Further details will be published on the scope of ICAEW practice assurance scheme visits to firms that are already regulated by a financial services regulator. ICAEW has stressed that it will adopt a light touch approach that seeks to avoid duplication of any regulatory oversight already provided by another regulator.

An ICAEW guidance document that explains the changes in detail, including the likely impact on members and details of the amnesty, is available on the ICAEW website. 

ICAEW has a dedicated hub that explains who needs a practising certificate, and how to apply for one. Find out more.