Personal independence FAQs
What is personal independence?
Independence, both in fact and appearance, is the ability of an individual to act with integrity, objectivity and impartiality. Being independent includes being seen by an objective, reasonable and informed third party to be independent – that is, that decisions by PwC professionals regarding our audit clients are not affected by a personal or financial relationship. By supporting your PwC person in complying with the firm's Independence Policy, you are helping to ensure that your PwC person and the firm is objective and impartial in their work.
A key control to demonstrate compliance with the firm’s Independence Policy is having the financial interests and arrangements of PwC partners, employees, third-party contractors and their immediate family members logged and declared as permissible on Checkpoint.
Who is an immediate family member?
An immediate family member is a spouse, spousal equivalent, or a dependent of a PwC partner, employee, or third-party contractor:
- A spouse either by marriage or under common law.
- Spousal equivalent is someone who you live with and share an ongoing intimate relationship with, regardless of whether their finances are handled separately.
- A dependent is anyone, whether related or not, who receives substantial financial support from you.(e.g young child, step-children that live with you, a child you're supporting at university).
I’ve heard the term ‘persons closely associated’. What does that mean and what am I expected to do?
‘Persons Closely Associated’ (PCA) include immediate family members as well as relatives and non dependent relatives living in the same household. If you are a ‘person closely associated’ with a PwC Partner, or a Director who is a ‘responsible individual’, they have to request information about your financial interests from you. However, if you are a ‘person closely associated’ with any other PwC professional and are not also an immediate family member, you do not need to tell the PwC professional about your financial interests and they are not required to ask you.
I’ve also heard the term ‘close family member’. Who are they and what are they expected to do?
‘Close family members’ include non-dependent children, parents and siblings. If you are a ‘close family member’ of a PwC professional, you do not need to tell the PwC professional about your financial interests and the PwC professional does not need to ask you.
When does personal independence take effect?
Personal independence of you and the PwC individual you’re associated with takes effect as soon as they sign their PwC contract of employment.
Annually, PwC professionals are required to confirm they have complied with the firm’s independence requirements throughout the year. PwC professionals are selected for personal independence compliance testing (PICT) periodically to ensure that their financial interests and other financial arrangements (including those of the immediate family) comply with the firm’s Independence Policy.
Who needs to comply with personal independence?
PwC partners, employees, third-party contractors and you (as their immediate family member).
How do I comply with personal independence regulations?
Disclose your financial interests and arrangements with the PwC professional you’re associated with. Before taking out any new financial relationships you must disclose them to the PwC professional you’re associated with to understand whether you are able to take out the financial relationship without impairing their personal independence.
If the PwC professional is manager grade or above, they will need to use PwC’s compliance tool - Checkpoint. The tool informs you which financial interests are permissible and alerts you if a financial interest becomes impermissible. All potential financial interests should be pre-cleared in Checkpoint. If the financial interest is then acquired, it must be logged as an acquisition in Checkpoint within 14 days.
Who can I contact for personal independence questions?
The PwC Personal Independence team is a dedicated resource to help you maintain personal independence by guiding you through the steps on how to remain compliant. The team can be contacted by your PwC professional at uk_independence_personal-independence@pwc.com. Furthermore, if you’re an immediate family member of a PwC partner, you have a dedicated named contact in the team who you can contact directly to get assistance with any personal independence questions.
What is Checkpoint?
Checkpoint is PwC’s personal independence software tool and is used by all PwC professionals who are manager grade or above. The tool is one of the firm’s most valuable safeguards and helps the PwC professional you’re associated with keep track of your financial interests, including the interests’ permissibility status.
How often should the PwC professional review our financial interests information in Checkpoint?
Depending on your investing frequency, we recommend that you set a reminder every 3-6 months for the PwC professional to check whether all financial interests are up to date in Checkpoint. Each year, your PwC professional has to reconcile their Checkpoint portfolio to their financial statements to confirm their portfolio is up to date when completing their Annual Personal Independence Confirmation. It is important to keep Checkpoint up to date - through the year, PwC professionals are selected for personal independence compliance testing (PICT) to ensure that their financial interests and other financial arrangements (including those of their immediate family) comply with the firm’s Independence Policy. Breaches identified are subject to sanctions depending on the nature of the breach and the grade of the PwC professional.
The PwC professional can also automate many investments by using Automated Investment Recording (AIR). AIR allows providers to send a daily feed from their systems directly to PwC. To find out more about AIR, your PwC professional can check the Personal Independence website via Concierge.
Do all potential financial interests need to be pre-cleared by the PwC professional in Checkpoint?
Yes. All potential financial interests need to be pre-cleared to check if they are permissible before acquiring the financial interest.
As an immediate family member, can I access and pre-clear my financial interests on Checkpoint?
No. The PwC professional you are associated with, must pre-clear and record all of your financial interests within Checkpoint (manager grade or above) or check the permissibility status on CES (below manager).
How long do we have to purchase a financial interest once it has been pre-cleared?
Pre-clearances are valid for 30 days. Your PwC professional will be notified of the pre-clearance approval via a notification from Checkpoint. If the financial interest is bought within this timeframe, they have 14 days to record that acquisition in Checkpoint.
How long does the PwC professional have to remove any of my disposed financial interests in Checkpoint?
14 days. When you dispose of a financial interest, such as by selling it, the PwC professional needs to remove it from their Checkpoint portfolio within the 14 day window. Note, only full disposals need to be logged, not partial disposals.
What financial interests should I disclose with my PwC professional?
All financial interests should be disclosed and most are required to be recorded on Checkpoint. Financial interests include: Listed shares / stocks, Exchange Traded Funds, holdings in collective investment funds, loan stock / debenture / other debt instruments, child trust funds, cryptocurrencies and tokens, investment linked funds embedded in a life insurance policy, a membership shareholding (such as the Wine Society), funds held in a non-PwC overseas pension.
Is the need for my PwC professional to report my financial interests in Checkpoint dependent on their worth?
No. All investments need to be logged regardless of the value. However, the PwC professional does not need to disclose how much your investments are worth.
What could happen if the PwC professional I am associated with does not use Checkpoint to pre-clear and record the acquisition of a financial interest?
The firm takes personal independence seriously and may impose sanctions for non-compliance depending on the nature of the breach and the grade of the PwC individual. If the financial interest is prohibited, it must be disposed of immediately. If there is a breach of external regulations, PwC is required to report the breach to the external regulator and the PwC Engagement Leader must report the breach to the client’s audit committee.
What key events (personal and professional) can influence my personal independence?
There are lots of events that can impact your personal independence, including: jobs or being promoted, taking out a mortgage, buying a new home, new financial investments, having or adopting a baby, divorce, becoming an executor, or taking on a power of attorney.
What does the independence policy require?
You need to be aware that the Independence Policy:
- Prohibits shares in any audit client of any PwC network firm, subject to certain exemptions
- Requires partners and staff at manager grade and above and their immediate family to log all holdings in financial interests on a confidential system called Checkpoint;
- Places restrictions on certain other financial interests and arrangements.. These vary depending on the the business unit and the clients served by your PwC person; and
- May have an impact on any services that a PwC person can provide to any company where you or a close family member work.
What can happen to PwC if the independence policy is breached?
Examples of consequences to the firm of an independence breach can include:
- Damage to the firm’s reputation;
- Sanctions on the firm by a regulator or one of our professional bodies;
- Loss of one or more audit clients;
- Actual or threatened litigation against PwC by a client or another party; and
- Rejection by a regulator of our audit report on a client.
What can happen to a PwC partner of the firm if the Independence Policy is breached?
Consequences of an independence breach for a partner of the firm can be serious and may include:
- A letter of reprimand;
- A fine;
- Impact on an individual’s annual performance evaluation and/or;
- Sanction by a regulator or one of our professional bodies.
Such consequences can follow even when the failure to comply with the independence standards was inadvertent.
What can happen to the PwC individual if the independence policy is breached?
The consequences for a breach of the independence policy will depend on the nature of the breach and the grade of the individual involved. Partners may be subject to financial sanctions; breaches by staff may be taken into consideration in their next performance appraisal and/or result in a requirement to attend a short training course on personal independence requirements.
It is worth noting that, in all instances, the consequences are minimised where issues are self-reported rather than found through testing. So, if a personal independence mishap occurs, talk to your PwC professional as soon as possible so that they can self-report the matter and the Personal Independence team can help them resolve the issue.
This is private information. What does the firm do to protect it?
Our independence requirements can seem intrusive but they are dictated by external regulation and help protect the firm. You can be assured that the firm takes data security seriously. All personal independence information provided to the firm is securely held in line with the firm's data classification policy for highly confidential information. Access to your information is monitored and restricted to individuals in the Personal Independence Team who need to know.
