PIMFA Weekly News Bulletin - 16 October 2020

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PIMFA WEEKLY NEWS BULLETIN | 16 October 2020 Welcome to your Weekly PIMFA Bulletin Grab a coffee and take 10 minutes to read this week's highlights and key issues affecting you and your firm

Dear Nigel,

Bulletin contains the latest industry news and updates on key issues PIMFA are working on for members. If you have queries on our work, or anything in Bulletin, please contact us.

LATEST NEWS

Brexit and PIMFA Members' Preparedness

The UK is due to exit the EU Single Market when the Brexit transition period ends on 31 December 2020. The negotiations on the terms of the future relationship between the UK and EU are ongoing but regardless of the outcome of the talks, firms with an EU footprint will need to adjust to operating from a third country in relation to the EU and decide how to access and operate on behalf of clients living in the EU. Retail financial services firms cannot rely on a pan-European set of rules for servicing customers in the EU and, with passporting lost and no equivalence available in the retail investment sector, the options for PIMFA firms to continue cross-border trade with the EU are limited and mostly dependent on the approaches adopted by national regulators in the EU Member States.

The rules that Member States will apply to cross- border trade post Brexit are mostly third country rules, not specific Brexit rules.

The FCA advises firms in the retail financial services sector who wish to continue to serve clients in the EU to speak to local regulators and ensure they understand the national regulator’s approach and the impact it will have on their business post Brexit transition.

Legal Advice?

We would like to hear from firms if they would like to obtain legal advice from a law firm on options available to them for servicing clients in the EU once the UK has left after the Brexit transition period on 31 December 2020. The cost of such advice would be shared among firms participating in the project. At this stage we would be grateful if you could indicate your interest to us by emailing Maja Erceg.

Brexit: Current State of Play

European Council Meeting

UK Prime Minister Boris Johnson has said

Brexit was the first item on the agenda of

that the UK should get ready for a no deal

the European Council meeting in Brussels

scenario with the EU. The UK is not

on 15 October as the EU27 leaders

walking away from the negotiations but

discussed the Brexit state of play behind

the Prime Minister said that the two sides

closed doors. In the Council conclusions,

will not be able to agree a deal unless the

EU leaders called for the talks to continue

EU changes its approach fundamentally.

and called on the UK to make the

The Prime Minister also said that the EU

necessary moves towards a deal.

refuses to consider the UK’s suggestion

Immediately after the meeting, UK Chief

for the future FTA to be based on the EU

Negotiator David Frost tweeted that he

– Canada deal and the alternative, in his

was "disappointed" at the tone struck by

words, is the arrangement Australia has

the European Council, and "surprised" by

with the EU, which is made up of a set of

the suggestion that, in order to agree a

limited agreements based on principles of

deal, all future moves must come from

global free trade.

UK. He called this an “unusual approach to conducting negotiation”.

The two sides blame each other’s stance for the deadlock and have a long way to

German Chancellor Angela Merkel, who

go in order to find solutions for agreeing

holds the EU Presidency, said after the

the three most difficult issues: level

European Council’s meeting that there

playing field, governance and fisheries.

was movement in some places and that

The EU Chief Negotiator Michel Barnier

both sides had to make compromises.

will travel to London next week to continue negotiations.

PIMFA Compare My Allocations report ESMA 'Plan B' for Eurodenominated Derivatives The 2020 Q4 PIMFA Asset Allocation Survey has now closed.

ESMA Chair Steven Maijoor said this

To find out more about your firms’ FREE

week that the EU will have ‘a plan B’ for

Compare My Allocations report, please

relocating clearing of euro-denominated

email indices@pimfa.co.uk.

derivatives from the UK to the EU if it decides against granting the UK long term equivalence. Such a decision would depend on relations between the regulators, ESMA and the Bank of England. Maijoor said that the EU’s ‘plan A’ is to support global capital markets and have equivalence but needs a ‘plan B’ if a

OECD Economic Survey of the UK

clearing house is of systemic importance or if cooperation between regulators is not as good as expected.

The latest OECD Economic Survey of the United Kingdom warns that the UK faces an exceptionally uncertain outlook due to major challenges from the COVID-19

Maijoor also said that ESMA will soon make a policy statement on where EU investors are obliged to trade EU listed shares. His expectation is that ESMA’s statement will be in line with previous publications on this matter. ESMA’s view has been that shares of EU listed

crisis and leaving the EU Single Market.

The report says that a rapid and massive emergency response has helped to steady the economy, but the United Kingdom still faces a prolonged period of disruption to economic activity, which risks exacerbating pre-existing inequalities and

companies should be traded inside the

regional disparities.

EU. OECD predicts that economic activity will only recover gradually, with several years Forthcoming PIMFA Committee Meetings

of high unemployment likely due to business closures and delayed investment. The Survey, assuming a smooth transition to an EU Free Trade

The Indices Committee meeting will be

Agreement, projects an unprecedented fall

taking place 22nd October.

in GDP in 2020 of 10.1%, with activity still below its pre-crisis level by the end of 2021. The unemployment rate is projected to be 7.1% in 2021, up from 3.8% in 2019.

PIMFA In the Press

FT Adviser: Succession-proof your firm by planning with clients Citywire: Revealed: FCA tells 51 firms to give up DB transfer permissions FT Adviser: Adviser lands at FSCS with claims worth thousands of pounds Money Marketing: Why we should introduce financial health checks Investment Week: #AskTwice: Why the industry needs to talk more about mental health Compliance Matters: PIMFA keeps pressure up on FSCS

Latest PIMFA Blogs & Press Releases

PIMFA urges Regulator to work more closely with industry to rebuild levels of trust in fair FSCS outcomes PIMFA welcomes FCA analysis of regulatory perimeter but calls for swifter action to protect consumers Mitigo joins as latest PIMFA Plus partner to help members combat alarming new trend in ransomware attacks Scams and FSCS issues are symptomatic of supervisory failings says PIMFA at Select Committee inquiry PIMFA welcomes FCA call for evidence on how to improve the consumer investment market PIMFA launches online ESG Academy to help advisers meet soaring investor demand PIMFA welcomes Work and Pensions Select Committee investigation into pension scams and wider inquiry into pension freedoms Blog: ESG and Covid 19

EVENTS & LEARNING

PIMFA Training Is your approach to vulnerability fit for purpose?

5 November

This practical live online learning session, underpinned by PIMFA member guidance on vulnerability, and delivered by an experienced senior practitioner will help your firm review your current approach to vulnerability in light of COVID-19 and recent regulatory announcements.

By attending this live online learning session, you will learn how to: • Interpret what the FCA latest guidance on vulnerability means for your firm.

• Grasp the full extent of your regulatory obligations on vulnerability in light of COVID-19 • Adopt the strategies and approaches leading firms take to developing and embedding a vulnerable-centric approach.

• Embed a culture that consistently supports vulnerable clients better than you do today.. and more...

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

PIMFA Training SM&CR conduct rules train the trainer programme 19 November As the regulator expects firms to have role-specific training in place providing a high degree of confidence that conduct rule breaches will be identified, a fresh approach to Conduct Rules training is required. But creating your own SM&CR Conduct Rules training in line with the FCA expectations stipulated in COCON 2.3 FCA Handbook takes time. Firms will need to plan, research, design, write, create and deliver practical sessions, with an emphasis on job role-specific training by 31st March 2021!

That’s why PIMFA has partnered with City HR to create a cost effective, ‘Train the

Trainer’ workshop and toolkit that takes all the hard work away from you – allowing you to focus on delivery only.

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

PIMFA Online Learning Authentic Leadership: How to thrive as a female leader in wealth and finance 24 November Early Bird Fee: £2,500 member | £3,000 non-members

Break through the barriers and get what you want from your career. This six month programme is for any woman seeking to reach her true leadership potential and for anyone — man or woman — looking to create a more gender-balanced workforce. Find out more about this ground breaking programme here.

PIMFA Training Getting the DB Pension transfer advice process right 24 November

In this online session we will help you: •

Understand what’s going wrong with DB pension advice, and how you can get it right

•

Grasp the FCA’s expectations as to how to act and treat customers

•

Identify weaknesses and poor practices in your existing advice process

•

Learn how to test whether your DB pension transfer advice is likely to stand up to FCA scrutiny

•

Receive tips on how to ensure you capture the right “know your customer” information from clients

•

Recognise how you can improve (and shorten!) your suitability reports

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

PIMFA Online Event The Financial Adviser Virtual Forum 25 November - Free to Members The Virtual Forum will be an opportunity for IFA professionals to hear from industry experts and the PIMFA policy team on a variety of topics such as: •

Pension Transfer

•

What to Look out for in 2021

•

Regulatory Updates

•

The Opportunities of ESG

•

And more…

The Forum will also enable attendees to earn CPD hours and to connect with fellow colleagues. This event is free for PIMFA IFA members.

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

PIMFA Online Conference Virtual Fest V2 27- 28 January 2021 Following on from the HUGE success of the inaugural PIMFA Virtual Fest in June 2020, we are proud to announce that bookings are now open for Virtual Fest V2. Taking place over two days (27 & 28 January 2021) the event will deliver presentations on key areas which members have identified as their key short- and long-term focus including: • Compliance • Risk and Resilience • ESG and Impact Investing • Cyber Resilience • and others A 50% early-bird discount is available to all PIMFA members if you book by October 31st For more info and to book your place please click here

The PIMFA ESG Academy, supported by Morningstar, is definitely NOT your traditional online class! As you learn at your own pace and in your own time, you will have access to an evergreen library of ESG content that you can engage and interact with on your tablet, computer and mobile – all free for PIMFA members!

The Academy was launched following growing demands by advisers for an immersive, engaging, CPD-approved learning experience that supports them in making the most of the growing ESG opportunity - find out more here.

WHAT'S HAPPENING IN OUR INDUSTRY

The European Federation of Financial Advisers and Financial Intermediaries (FECIF) survey on ESG

This survey's initial research indicates that only a quarter of advisers always consider ESG investments. While it found over 90% of financial advisory professionals considered ESG investments some of the time, just 23% did so all of the time, which is potentially concerning, given the progression of EU regulations relating to ESG factors, the first of which are expected to commence from as early as March 2021.

The survey is available to financial advisers across the European Union and is helpful as it provides a range of perspectives from different countries and different market formats.

25% Off All Harriman Books - For PIMFA Members Only

In partnership with Harriman House, PIMFA is delighted to offer members an exclusive 25% discount on high quality books from over 300+ titles in print, eBook and audio form find out more.

ESG Disclosures Templates survey

The European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) have published a survey seeking public feedback regarding the presentational style of product templates, in regard to Article 8(3), Article 9(5) and Article 11(4) of the disclosure regulation (2019/2088).

In particular, the survey is a response from the ESAs to the feedback submitted to the ESG Disclosure Regulatory Technical Standards (RTS) Consultation, which indicated that the proposed RTS were too granular. The ESAs are keen to get more feedback, as the final content of the templates is still subject to the outcome of a concurrent consumer testing exercise and the ESAs’ final report on the draft RTS under SFDR.

Latest PIMFA Consultation Responses

PIMFA’s latest consultation response is: HM Treasury/DDCMS Consultation: Expanding the Dormant Assets scheme

Read this and all of our other PIMFA consultation papers here.

FCA: Industry to begin testing the Financial Instruments Transparency System (FITRS)

As part of developing the post-exit MiFID regime, industry testing for FCA FITRS (Financial Instruments Transparency System) opened on 5 October 2020. The FITRS system will be available for testing and FCA have published accompanying FITRS technical specifications.

FCA will be holding virtual workshops with the industry during October 2020 to get feedback on FCA FITRS and FCA FIRDS (Financial Instruments Reference Data System), which continues to be available for testing. They will communicate with firms and trade associations about this shortly.

They encourage third party data providers, venues and trading firms to engage with the parallel run of FITRS and to give them feedback. This will ensure a smooth transition to the new regime in January. To provide feedback after 5 October 2020, please email them at fcafitrs@fca.org.uk.

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