The 2024 Q2 PIMFA Asset Allocation Survey IS OPEN
Complete this quarter's survey(s), and you can:
• Receive a complimentary, 40-page report, showing how the strategic asset allocations of your firm’s model portfolios compare to the peer average.
• Ensure the index weight methodologies for the MSCI PIMFA Private Investor and
• Equity Risk Index Series’ remain relevant benchmarks for the UK wealth management sector.
Registered firms, simply click here to login and submit your firms quarterly strategic asset allocations using our new and improved dashboard.
We value and encourage participation from our full member firms, email indices@pimfa.co.uk now for more information/sign-up.
FCA Consultation on Payment Optionality for Investment Research
The Financial Conduct Authority (FCA) has published a Consultation (CP24/7) on one of the seven recommendations made in the July 2023 HM Treasury Investment Research Review (IRR): Recommendation 2: Allow additional optionality for paying for investment research. In summary:
• Following HM Treasury IRR recommendations made in July 2023, an FCA survey has found that firms are largely getting the research they need under the current rules.
• However, the options available to firms can be complex and may favour larger asset managers. The current rules can also restrict
UK firms from buying investment research produced outside the UK.
• Therefore, in this Consultation, the FCA is proposing to give firms greater freedom in how they pay for research. The FCA note that greater choice should suit firms of varying business models and sizes, helping to promote competition.
• The proposals will allow payment ‘bundling' for third-party research and trade execution. They would exist alongside those already available, such as payment from a firm's own resources or a dedicated research account. The proposals will be compatible with rules governing research payments in certain other major jurisdictions, making it easier for firms to buy research in the same way across borders.
• The proposal is a reversal of the MiFID II rules introduced in 2018, which prevented the bundling of research and execution payments. While the FCA stresses these rules were introduced for good reason, it recognises concerns that the practice has led to “duplicative or low-quality research” and “opaque charging structures”.
• In our PIMFA response to the initial HM Treasury review in June 2023, we acknowledged the merits of allowing bunding but stressed that it is unlikely to benefit the retail sector materially and will depend on how larger firms decide to act on this change, notwithstanding challenges from reversing what was required and implemented as part of MiFID II.
The deadline for comments is 5 June 2024, and PIMFA will respond to this Consultation. If you wish to participate in the response or have views to share, please get in touch with David Ostojitsch.
The Financial Conduct Authority (FCA) has published proposals for its regulated fees and levies rates to fund the FCA and the Financial Ombudsman Service (FOS). CP24/6 also covers rules that enable the FCA to collect certain levies on behalf of government departments (Chapter 6).
The proposals apply to all FCA fee-payers and to any businesses considering applying for FCA authorisation or registration:
• From 2024/2025 the FCA plans to increase the relevant fees by 8.75% and resume staged increases for A-block and consumer credit minimum fees.
• The FCA is also consulting on allocating the FOS general levy between industry blocks (Chapter 5) which is payable by all firms authorised or registered by the FCA.
• The FCA also proposes changes to rules in the FEES Manual (Appendix 1).
Access the consultation here
The deadline for comments is 14 May 2024. PIMFA will be drafting a response. Members who wish to discuss/share their views please contact Yasmin Ataullah.
Financial Conduct Authority updates perimeter report
The Financial Conduct Authority (FCA) has updated its perimeter report webpage which explains the areas regulated by the FCA and describes specific issues as well as actions being taken in response to perimeter-related issues. The previous version of the report was published in March 2023.
• Areas with substantial updates include contracts for differences, financial promotions on social media (including influencers), and unregulated collective investment schemes (UCIS).
• The consumer investments section also covers the overseas fund regime and the marketing of high risk investments to retail consumers.
Information Commissioner’s Office issues new guidelines on data protection fines
The Information Commissioner’s Office (ICO) guidance sets out the circumstances in which it would consider it appropriate to issue a penalty notice.
The publication sets out:
• The statutory background
• Circumstances in which the ICO would consider fines appropriate
• A step-by-step guide on how the ICO calculates the appropriate amount of fine
The ICO Guidance can be accessed here
Companies House - power to impose civil financial penalties
As of 2 May 2024, Companies House will have the power to impose civil financial penalties for most offences under the Companies Act 2006, following the Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024 being made.
• The Regulations set out the process which Companies House needs to follow when issuing a penalty notice and the maximum penalty which can be imposed.
• The explanatory memorandum states that Companies House will publish guidance on how it will exercise its new power under the Regulations before it starts issuing financial penalties.
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