PIMFA Weekly News Bulletin - 11 December 2023

Featured: PIMFA welcomes the FCA's proposals for improving financial advice to consumers

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PIMFA WEEKLY NEWS BULLETIN 11 December 2023

Advice Guidance Boundary Review The FCA have outlined proposals as part of its ongoing Advice Guidance Boundary Review.

In short, the FCA has proposed: •

Further clarifications of the boundary which would provide authorised firms with greater clarity on giving support to consumers without providing a personal recommendation. These clarifications build on the recent Boundary Clarification document which was published in August.

•

Targeted Support which would allow firms to guide consumers to solutions for ‘people like them’ based on limited information.

•

Simplified Advice which builds on the FCA’s initial core investment advice proposals albeit expanded on the initial proposals.

PIMFA will be formulating its response through the Advice Guidance Working Group. Firms who have interest in participating in this process should speak to Simon Harrington.

Bank of England / PRA / FCA Consultation Paper (CP) 26/23 ‘Operational Resilience: Critical third parties to the UK Financial Sector’ This joint consultation paper sets out the proposed requirements to be established in rules and accompanying expectations for critical third parties (CTPs), and seeks industry views. Read the paper here.

The aim of these requirements is to manage potential risks to the stability of, or confidence in, the UK financial system, which may arise due to failures or disruptions in a CTP's services. HMT will formally designate third parties based on recommendations from the regulators. The closing date for comments on this CP is 15 March 2024.

We have invited one of the CPs authors to meet with members of the PIMFA Operational Resilience Working Group in January, to explore CP 26/23 and answer questions.

If you are not already a member of this working group and would like to join, please contact Kevin Sloane.

HMT announces update to high risk third country list HMT has published the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No.2) Regulations 2023 (SI 2023/1306).

This SI amends the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) (the MLRs) by substituting the List of High-Risk Third Countries (in respect of which extra customer due diligence measures must be taken by relevant persons under the MLRs) in Schedule 3ZA for a new list.

Changes to note include:

•

Albania, Cayman Islands, Jordan and Panama are no longer classed as high-risk third countries for the purposes of enhanced customer due diligence requirements in regulation 33(1) of the MLRs.

•

Bulgaria, Cameroon, Croatia, Nigeria, South Africa and Vietnam are now classed as high-risk third countries for the purposes of enhanced customer due diligence requirements in regulation 33(1) of the MLRs.

FCA CP23/26: Implementing the Overseas Funds Regime (OFR) The FCA has published a consultation paper setting out proposals for the rules and guidance to integrate the OFR into the FCA Handbook and to enable recognition of overseas funds from jurisdictions approved by HM Treasury.

In the paper, the FCA proposes categorising information that overseas schemes will need to submit to become recognised by the FCA under the new regime – including key information

about the scheme’s investment objective and policy, and the main categories of assets it invests in.

The FCA has also put forward new measures to ensure investors are aware of the protections they have, such as the FOS and the FSCS. The consultation is open until 12th February 2024. Please contact Simon Harrington for more details or to give input. To read the consultation paper, click here.

FOS: Draft SI and the Plans and Budget 2024-25 Consultation The Government has published a draft SI and policy note enabling the Financial Ombudsman Service (FOS) to charge case fees to claims management companies (CMCs) and other relevant professional representatives.

This draft SI comes in support of the FOS’s Plans and Budget 2024-25 consultation which set out the work FOS have made to improve the services they offer consumers and businesses, and their plans to reduce the cost of the ombudsman service to industry in the next financial year.

The consultation is open until 30th January 2024. PIMFA is responding to both the draft SI and the consultation. Please contact Simon Harrington for more details or to give input.

To read the draft SI and policy note, click here.

To read the consultation paper, click here.

FCA Consumer Duty Next Steps webinar The FCA’s Consumer Duty Next Steps webinar (6 December) set out expectations on firms and shared insights to help firms embed Consumer Duty. The FCA acknowledged the work undertaken by firms to meet the first implementation deadline and advised firms to prioritise two areas so as to meet the 31 July 2024 requirements, closed products and the annual board report.

Consumer Duty was noted as an integral part of the regulator’s approach throughout each stage of the regulatory cycle. In addition to individual and multi firm reviews of board reports, the FCA will also work to address cross sectoral concerns such as complaints handling.

In reference to recent Dear CEO letters issued to the consumer investments sector, firms were advised to consider these in detail, review their own processes and approaches, and ensure they can evidence the steps taken to address the FCA’s stated areas of concern.

The regulator noted that firms should continue to embed Consumer Duty and make the necessary changes to their policy, systems, and communications to ensure consumers’ needs and outcomes are prioritised. The expectation is for firms to continually review, revise and refresh their Consumer Duty frameworks.

In addition to sharing examples of good and bad practice across the industry, FCA key areas of focus such as fair value, vulnerability and information sharing were also discussed.

Members can access the recording here.

Following March’s successful Roadshow, the PIMFA team are heading back to Bristol for another Regional on 14th December. This free event will provide attendees with the opportunity to hear rom subject matter experts on relevant industry topics (earn up to 3 hours Of CPD) and network.

Book Now

PRESS RELEASES

PRESS COVERAGE

PIMFA welcomes the Financial

CityAM: FCA proposes simpler

Conduct Authority’s proposals for

financial advice to cut costs for

improving financial advice to

consumers

consumers The Daily Telegraph: Savers to get PIMFA welcomes FCA proposals for

cheaper financial advice under plans

Sustainability Disclosure

to get Britain investing

Requirements The Financial Times: Financial PIMFA to work with FCA on

services: time to take account of

proposed ‘polluter pays’ model for

neurodiversity

personal investment firms Reuters: Britain proposes simpler Greater personalisation may

financial advice to cut costs for

encourage greater saving & investing

consumers

in UK, although there are limits to how much, PIMFA research finds

READ MORE

READ MORE

PIMFA LEARNING

14 December 2023

12 December 2023

Webinar | 11:00 - 12:00 | Free

Webinar | 11:00 - 12:00 | Free

Get up to date on the SDR and investment

Data subject access requests: how to

labels final rules and guidance

recognise, handle and respond

Join us for this FREE 60-minute webinar on the

proportionately

Sustainability Disclosure Requirements and

In this FREE 60-minute webinar, Richard

investment labels regime and a deep dive into

Preece will speak to Chris Holme and Sarah

the final rules and guidance.

Riceman from Clyde & Co. They have been managing DSARs (including in relation to large disputes), and complaints, between them for 20

The Sustainability Disclosure Requirements

years – and have a huge body of experience

and investment labels regime aims to help

around how to manage DSARs, the legal

consumers navigate the market for sustainable

requirements, and the ICO’s expectations.

investment products.

They will discuss how PIMFA member firms can:

Speakers:

•

React and respond to a DSAR with professionalism and speed

•

Jessica Reed, Partner, Farrer&Co

•

Kya Fear, Associate, Farrer&Co

and redacting information so as to not

•

Vanessa Bingle, Director, ESG and

disclose any information the requester

•

is not entitled to

Responsible Investment, Alpha FMC •

Ensure they are correctly identifying

Dominic Lloyd, Senior Manager, Alpha

•

Identify when a request is manifestly unfounded and excessive and respond

FMC

appropriately •

Regardless of size, have effective management in place to efficiently

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respond to DSARs •

Be prepared for any regulatory scrutiny and enforcement action when handling DSARs

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