Independence can be described as integrity, professional scepticism, intellectual honesty, objectivity, and freedom from the conflicts of interest both in fact and appearance.

On a practical basis, for Deloitte, independence means maintaining integrity and objectivity with regards to the entities that we audit.

This is required for the firm as a whole, as well as for all individuals who work at Deloitte – not just those who work in Audit.

There are several regulatory bodies who lay out the rules and requirements to which we must adhere, in order to maintain and demonstrate Personal Independence.

Audit clients, their affiliates and any other clients for which the firm has to maintain its independence are known as “restricted entities”.

What are my responsibilities?

Given that independence can be impacted by our financial arrangements and employment relationships, including those of our immediate family members (IFMs), you can take a number of small actions that will help us maintain our independence.

• It is a requirement for all staff and partners who have an online compliance record, to maintain a current record of all current financial interests (including those of IFMs), within 10 days of acquisition, on the firm’s compliance system – the Global Independence Monitoring System (GIMS).
  • This system allows us to monitor and ensure that we, as individuals and as a firm, remain independent from our Audit clients.
    
    
• Prior to making any investments, you need to check whether or not that investment is restricted. This is referred to as “pre-clearing”. Partners and directors must do this via the dedicated helpline – and all other staff can do this via GIMS.
  • NB: These checks must be made for any investments which are planned by either the Deloitte member – or their IFM(s).

Not only do we as an organisation have to comply with certain independence requirements but our professionals (including their immediate family members – IFMs) do as well.

By complying with the independence requirements we satisfy the expectations of our regulators whilst also maintaining the trust of our clients and the public and protecting Deloitte’s reputation.

It is effectively, our license to do business and getting it wrong can result in fines, loss of reputation and potentially disciplinary action against the individuals involved.

Our regulators view spouses, “spousal equivalents” and financial dependents as equivalent to the Deloitte professional in many situations.

The regulations refer to them as “immediate family members (IFMs)” and you will be able to learn more about what this means specifically, elsewhere on this site.

Independence can touch on a wide range of topics, from the services provided by Deloitte – right down to your own personal finances as the spouse (or equivalent) of a Deloitte professional.

For example, did you know that if you wanted to purchase stock in a company, you will need to investigate whether your spouse is allowed to invest in that particular company?

Whether your spouse works in Audit, Consulting, Tax – or any other of the business areas within Deloitte – some level of independence requirements will apply to you both.

For Independence purposes, an immediate family member (IFM) is defined as:

• a spouse or spousalequivalent (girlfriend, boyfriend, civil partner); 
• who lives with you 100% ofthe time (even if across more than one address); or
• a family member who isfinancially dependent on you (for 50% or more of their cost of living).
  

• We know that maintaining personal independence can be complicated, so Deloitte has partnered with over 30 leading financial providers to provide Deloitte professionals and their immediate family members (IFMs) with a simplified way to maintain independence records. This panel of over 30 financial providers is called ‘My Financial Provider Network’ (MFPN). 
• It is mandatory for all Deloitte individuals with a GIMS account to use MFPN for all new investments – this includes new arrangements (e.g. a SIPP or an ISA) and also new funds or stock. This means that they can only take out new investments and/or make changes to underlying holdings in existing investments via one of the approved MFPN providers. 
• IFMs are not mandated to use MFPN, though it is recommended. 
• MFPN makes it easier for Deloitte professionals – and their IFMs – to record financial interests and invest within permitted holdings, ensuring compliance with personal independence requirements. It does this in two ways:
  • The automated data feed; and
  • The Deloitte Pre-cleared Investment Portfolio (DPIP).
• To find out more or raise any questions, please contact the MFPN Helpdesk on 02920 927 680. 
• Using MFPN reduces administration, reduces the amount of time you need to commit to ensuring that your spouse/spousal equivalent/family member that works at Deloitte stays compliant – and helps them to avoid breaching Deloitte policy.

Financial interests are covered by our independence policies, for example:

• Brokerage accounts
• Personal pensions and SIPPs
• Employment pensions
• Stocks and shares
• Mutual funds and unit trusts – including ISAs
• Child Trust Funds and Junior ISAs

Other financial relationships are also considered such as:

• Bank Accounts
• Personal lending, including credit cards
• Mortgages

The rules apply by taking into account the facts and circumstances of the situation.

You may have already heard the phrase “restricted entity”: This is the term we use to refer to our audit clients, and their affiliates.

If you, any other IFM, or your spouse/spousal equivalent wants to invest in a particular restricted entity, they should first verify whether it is restricted for the Deloitte individual, based on the rules and the scope of their role. We refer to this process as pre-clearance.

If it is restricted for that individual, they should not acquire the financial interest or enter into a financial relationship with that entity.

Similarly, if an individual has an existing financial relationship and that company becomes restricted for them – they may need to divest.

For example, if you have a financial relationship with a company, that becomes a Deloitte audit client; this relationship may become one that our independence policies do not permit. In that case, you will need to take action to resolve any outstanding independence issues.

You should be aware that a resolution might result in you having to take a loss on an investment, prepaying a load that still has favourable rates, or otherwise incurring a cost.

Please don’t forget to consider:

• your current employer pension
• any assets under your control or influence – for example via a Power of Attorney or executorship
• former employer pensions belonging to you or your spouse/spousal equivalent

Another area of independence which impacts many Deloitte professionals is the employment relationships of their spouses, their dependents and their close relatives.

In addition to IFMs, we need to consider close relatives – including parents, stepparents and siblings, when considering employment relationships.

These rules do not normally apply to your own close relatives, only those of the Deloitte professional.

Does it matter where you work?

It could matter, it all depends on the role of the Deloitte professional and the role you have with your own employer.

If you are employed by a restricted entity, your spouse will report this in their annual independence returns. We can then analyse the facts and circumstances to see if there would be a conflict under any of the regulatory rules that apply to that specific client.

The Deloitte professional does not need to wait for their annual independence return but instead should report this as early as possible so that we can provide you with the advice and guidance that you need.

What would we consider in our analysis?

Different aspects of your employment and circumstances can impact independence – for example:

• What type of position you hold
• Whether your spouse will provide services to the client – or its affiliates
• Whether or not you have an employee pension plan with or investments in, the restricted entity (such as company shares.)