PIMFA Weekly News Bulletin - 1 March 2021

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PIMFA WEEKLY NEWS BULLETIN | 1 March 2021 Dear Nigel,

Welcome to the PIMFA Bulletin; grab a coffee and take 10 minutes to read this week's latest industry news impacting you and your firm.

PIMFA VIRTUAL FEST V2 9-10 March 2021 FREE to attend for PIMFA Members & Associates REGISTER TODAY: Click here to book your place

The Latest on Brexit

Brexit deal ratification in the EU extended The UK government has accepted an EU request for additional time to ratify the EU – UK Trade and Cooperation Agreement. The EU said it needed two more months to scrutinize the post Brexit deal in all EU languages. Cabinet Office Minister Michael Gove said that a delay in ratification was not the UK’s “preferred outcome given the uncertainty it creates for individuals and businesses.” In a letter to European Commission Vice-President Maroš Šefčovič, Gove said that the UK expects the EU to satisfy its internal requirements by 30 April 2021. Whilst this uncertainty persists, Gove added, the UK did not consider that the Partnership Council and other bodies should begin their work formally.

Andrew Bailey on euro derivatives trading relocation Speaking at the House of Commons Treasury Committee on 24 February, Andrew Bailey, Governor of the Bank of England, said that the Bank will “resist very firmly” any attempts the EU might make to force relocation of euro derivatives trading from the UK to the EU. Baily warned that such a move would fragment the derivatives market and increase the cost of trading. He explained that in an activity like clearing, the efficiency comes from having a very deep pool of derivatives and to “break that down would increase cost, no question of that.”

It has been reported recently that the Commission has asked EU banks to justify why they should not have to shift euro dominated clearing out of the UK to the EU. Bailey said to MPs that three-quarters of the business is carried out in the UK on behalf of non-EU firms and trying to force them to shift their business away from London could involve methods of "dubious legality".

EU firms apply for UK licence More than 400 insurance firms and more than 100 banks plan to move to or boost their presence in the UK post Brexit. A Freedom of Information request by financial consultancy Bovill found that 1,500 money managers, payment firms and insurers have applied for regulatory permission to continue operating in the UK after Brexit. Around two-thirds of these firms had no prior physical presence in the UK. Most applications came from firms in Ireland, France and Germany.

UK Unemployment Rate According to figures published by the ONS, UK’s unemployment rate continued to increase and the employment rate continued to fall from October to December 2020. The employment rate was estimated at 75%, 1.5% lower than in 2019, and 0.3% lower than the previous quarter, while the unemployment rate was estimated at 5.1%, 1.3% higher than a year earlier and 0.4% higher than the previous quarter.

New analysis by age band shows that the 18 to 24 years age group has seen the greatest decrease in pay-rolled employees since February 2020. The number of job vacancies in November 2020 to January 2021 was 26% lower than a year ago.

International Trade in Financial Services

A new report from UK Finance, International Trade in Financial Services, says that liberalizing trade in financial services does not have to “come at the expense of domestic standards, or with the requirement for deregulation.” The case for open trade in financial services is no different from the case for open trade in general. Access to foreign suppliers alongside domestic ones can create new competition and choice and push down costs, the report says. To liberalise trade in financial services is not to deregulate the supply of these services. It is to allow and facilitate supply by foreign providers alongside domestic ones on equal terms. The UK can support openness in financial services trade by signing up to a manifesto for ‘regulatory diplomacy.’ Instead of trying to cut away at rules, the UK should influence how global standards are written, the report argues.

ESAs issue recommendations on the application of the Regulation on sustainability-related disclosures

On 25 February, the three European Supervisory Authorities (EBA, EIOPA and ESMA) published a joint supervisory statement on the effective and consistent application and national supervision of the Regulation on sustainability-related disclosures in the financial services sector (SFDR). In the statement, the three ESAs recommend the draft RTS be

used as a reference when applying the provisions of the SFDR in the interim period between the application of SFDR (as of 10 March 2021) and the application of the RTS at a later date.

The ESA’s statement complements the Final Report including the draft regulatory technical standards issued by the ESAs Joint Committee on 4 February 2021. National competent authorities are encouraged to refer financial market participants and financial advisers to the requirements set out in the draft RTS of the final report that has been submitted to the European Commission.

Index Weight Changes to the MSCI PIMFA Index Series

In response to quarterly survey submissions from PIMFA member firms regarding the asset allocation to Objective and Equity Risk based model portfolios, the PIMFA Indices Committee has made changes to the index weights of both MSCI PIMFA index series.

Further details can be found here: - MSCI PIMFA Private Investor Index Series index weight changes.

- MSCI PIMFA Equity Risk Index Series index weight changes.

If you have any queries, please email indices@pimfa.co.uk.

Latest PIMFA Press Releases

PIMFA launches second Virtual Fest with Treasury’s John Glen unveiled as a keynote

Latest PIMFA Press Coverage

IFA Magazine: PIMFA expresses concern about freezing of the Pensions Lifetime

speaker

Allowance

PIMFA calls on Government to include

FT Adviser: Broken regulation has

economic harm in Online Safety Bill as

crushed adviser morale: Pimfa

members report rise in increasingly sophisticated online scams

Professional Adviser: Tim Sargisson - PIMFA PIMFA delighted to welcome Investec’s Ciaran

and the value of advice

Whelan and Openwork’s Mike Morrow to Board

Daily Mail: Investors could face higher bills after compensation bill for victims of mis-

PIMFA calls on Industry, Government and

selling and collapsed firms tops £1bn

Regulators to work together to create a future advice market that works for all

Lovemoney.com: Clone firm investment scams: how they work, how to spot them and

Little regulators can do to stop fraud

stay safe

without action from Government CityAM: Screenshot: Should online harms laws take on the hackers and pirates?

Upcoming PIMFA Committees

W/C 1st March: Monday 1st March: Advice Group – contact Alexandra Roberts

Week commencing 8th March Wednesday 10th March – DFM Connect – contact Sarah McGuffick Thursday 11th March – Regulatory Committee – contact Giulia Lupato

PIMFA's Consultation Responses & Member-Only Guides

PIMFA’s latest Consultation Response is to HM Treasury on the Future Regulatory Framework Review. Read this and all other PIMFA consultation papers here.

PIMFA also regularly produces member only guides on key industry topics such as remuneration, vulnerable clients, cyber resilience, pension transfer advice etc.

Members can log in and access these guides at https://www.pimfa.co.uk/members/commspublications/guides-for-members/

EVENTS & LEARNING

PIMFA Events PIMFA VIRTUAL FEST V2 9-10 March 2021 FREE to attend for PIMFA Members & Associates For more info and to book your place, please click here.

PIMFA Webinar LOCKDOWN AND RETURN TO WORK – WHAT PIMFA MEMBERS NEED TO BE DOING IN 2021 4 March 2021 Fees: FREE The Covid-19 pandemic and its impact on employers, employees and the workplace continues. However, companies need to look ahead and plan for the future if we want to ensure that our businesses are in the best possible position as we come out of this period of immense disruption.

This free 60 minute webinar with Chris Holme, Employment Partner at Clyde & Co LLP is aimed at HR professionals, in-house employment lawyers, and anyone else in PIMFA member organisations who is involved in planning for what the workplace will look like as and when we come out of this pandemic. The webinar will enable you to reflect on your own business planning for the future “post pandemic” world.

Agenda: •

A review of current government guidance and support available and what this means in practice;

•

Consideration of the actions that companies should be taking now;

•

Discussion of how companies can, and should, plan for a return to the workplace and the “new normal”, including how to plan for the shift in culture (around flexible working arrangements and homeworking) which the pandemic has fuelled; and

•

Looking at some of the most common issues we are seeing, from changes to terms and conditions, redundancies connected to the pandemic, and restructures – and the practical and legal issues around them.

For more info and to book your place, please click here.

View all other upcoming PIMFA Events and Learning here.

FCA publishes Guidance for firms on fair treatment of vulnerable customers

On the 23rd February, the FCA published its finalised ‘Guidance for firms on the fair treatment of vulnerable customers’ (FG21/1). The FCA wants to drive improvements in the way firms treat vulnerable consumers and wants to ensure that vulnerable consumers experience outcomes as good as other consumers and get consistently fair treatment.

The finalised guidance is wide-ranging and apart from some minor amendments and clarifications, remains substantially the same as the prior draft. The guidance does not create new legal or regulatory obligations and is not a check-list of required actions, but is intended to provide options for ways in which firms can comply with the existing ‘Principles of Business’. The guidance document sets out practical steps that firms can take in translating the FCA’s expectations into action and includes examples and case studies of good or poor practice.

Firms are expected to: •

Understand the needs of vulnerable customers in the context of the firm’s target market

and customer base and understand how vulnerabilities could affect the customer experience and outcome; •

Ensure that staff have the appropriate level of knowledge, skills and capabilities to

recognise and respond to the needs of vulnerable customers; •

Respond to vulnerable customers’ needs throughout product and service design,

flexible customer service and appropriate communications; •

Monitor and assess whether they are meeting and responding to the needs of

vulnerable customers and make improvements if necessary.

The FCA supervises and enforces against the standards set by the Principles so firms can expect to be asked to demonstrate how their business model, their actions and their culture ensures the fair treatment of all customers, including vulnerable customers.

Following on from the publication of the FCA guidance, PIMFA will be updating its Guide to Vulnerable Customers. We would also like to create an Appendix of case studies, so that we can provide a list of common issues and possible solutions relating to vulnerable customers. The case studies would be anonymised and filed together, according to topic, to provide a useful source for members in devising their vulnerable customer policy and processes. We would be very grateful for any scenarios and case studies that members could provide.

The finalised guidance can be read here and, if you would like to get involved or have any

case studies to offer, please get in touch with Alex Roberts.

Find Out More about PIMFA ...

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