PIMFA Weekly News Bulletin - 18 January 2021

View this email in your browser

PIMFA WEEKLY NEWS BULLETIN | 18 January 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.

The Latest on Brexit

ESMA Statement on Reverse Solicitation

The European Securities and Markets Authority (ESMA) issued a statement on 13 January reminding firms not established in the EU of the MiFID II rules on ‘reverse solicitation’ in the context of the recent end of the UK transition period. ESMA draws attention to some questionable practices by firms around reverse solicitation which have emerged since 31 December 2020. For example, ESMA says that some firms appear to be trying to circumvent MiFID II requirements by including general clauses in their Terms of Business or through the use of online pop-up “I agree” boxes whereby clients state that any transaction is executed on the exclusive initiative of the client.

ESMA reminds firms that a) the provision of investment services in the EU without proper authorisation in accordance with the EU and the national law applicable in Member States exposes service providers to the risk of administrative or criminal

proceedings, or the application of relevant sanctions, b) when using the services of investment service providers which are not properly authorised in accordance with EU and Member States’ law, investors may lose protections granted to them under EU relevant rules, including coverage under the investor compensation schemes in accordance with Directive 97/9/EC.

Guidance Document for the UK’s Equivalence Framework for Financial Services On 14 January, HM Treasury published the Guidance Document for the UK’s Equivalence Framework for Financial Services, outlining the principles and processes which will govern the UK’s equivalence framework. The document highlights the UK’s commitment to an outcomes-based model of equivalence, which operates in a transparent manner, providing predictability and stability over time to UK industry, overseas jurisdictions and firms. The UK will assess overseas regimes with a view “to support cross border financial activity in a way that safeguards financial stability and investor protection” whilst maintaining “open and ongoing” dialogue with industry players. The Government’s aim is to maintain an open and globally integrated financial system underpinned by the highest standards of regulation and supervisory oversight. The UK’s equivalence decisions would be cancelled only with “appropriate adaptation periods to allow firms time to prepare.”

UK – EU MoU on Financial Services Cooperation

The deal agreed between the UK and EU before the end of the Brexit transition period does not cover the financial services sector but the two sides have agreed to sign a cooperation agreement to cover financial services regulation by March this year. The talks will start this week on the agreement ( Memorandum of Understanding) that will not be legally binding or offer the kind of access to the EU Single Market the UK financial services industry has been hoping for but will provide a framework for future regulatory dialogue and policy work.

Equivalence determinations remain the basis for cross border trade between the UK

and EU but, so far, the EU found the UK equivalent on a temporary basis in only two areas, those being clearing and transaction settlement. The UK gave the EU 17 findings that allow the EU firms to do business in the UK. The EU is unlikely to make new equivalence determinations for the UK’s financial services sector without receiving from the UK clarifications on its plans to diverge from current regulation.

UK financial services firms have been adjusting to the new reality by applying for licences in the EU and moving some operations to the continent. According to the Bank of England, 7,000 jobs have shifted from the UK to the EU so far.

EU Assessing UK Data Protection Regime Speaking to the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs on 14 January, the European Commission’s Head of Data flows Bruno Gencarelli said that the European Commission is finalising its assessment of the UK data protection regime and will start the decision making process within weeks.

In order to allow data to continue flowing between the UK and EU, the two sides agreed just before the Brexit transition period ended that the UK will remain governed by the EU’s data transfers framework for a maximum of six months. Under the interim agreement, which is part of the trade deal, the EU has four months to ratify an adequacy decision for the UK, with the option to extend that timeline by a further two months if necessary. The Commission’s proposal, once completed, will be sent to the EU data protection authorities for an opinion as well as to the Member States for approval.

Expanding the Dormant Assets

ICO publishes Data Sharing Code

Scheme The Information Commissioners Office (ICO) has published on its The Government has published a

website their new data sharing

response to its February 2020

code, along with a range of new

consultation on expanding the

resources. The Code addresses

Dormant Assets Scheme. The

many aspects of the new legislation

response confirms that - "when

including transparency, lawful bases

parliamentary time allows" -

for using personal data, the new

legislation will be enacted to extend

accountability principle and the

the Scheme beyond its current

requirement to record processing

focus on bank/building society

activities.

deposits to include "new assets in the insurance and pensions,

Alongside the Code, the ICO have

investment and wealth

launched a data sharing information

management, and securities

hub where organisations can find

sectors". While further work will be

targeted support and resources

needed to provide clarity on issues

(checklists, toolkits, FAQs, case

of scope and operation, the

studies etc).

Government has committed to the ongoing application of the current

The ICO is also encouraging

Scheme's principles, namely -

organisations that are developing

•

products and services that support

industry participants' first priority

is to reunite owners with their

complex data sharing in the public

assets;

interest to apply for its regulatory

•

Sandbox.

owners are able at any point to

reclaim the full amount owed to them; and •

participation in the Scheme is

voluntary

The Governor of the Bank of England on Economic Recovery

Andrew Bailey, Governor of the Bank of England, gave an online speech to the Scottish Chambers of Commerce, saying that the shape of the economic recovery would broadly follow the forecast made by the Bank’s Monetary Policy Committee in November. He added that the UK economy is facing its “darkest hour”, due the latest Covid-19 lockdown, but the country would bounce back after the lockdown has

ended.

Bailey also said that the rate of unemployment will be lower than previous estimates of 7% or 8% and will reach around 6.5%, as a result of various measures that the government has introduced in order to safeguard household incomes. Speaking about negative interest rates, Bailey said that such a move would hurt banks and potentially make the situation worse. “In simple economics and maths terms, there is nothing to stop it at all,” he said. “However, there are a lot of issues with it.”

LSEG acquisition of Refinitiv approved by the European Commission

The European Commission (EC) has approved, under the EU Merger Regulation, the acquisition of Refinitiv by the London Stock Exchange Group (LSEG). Their approval is conditional on full compliance with a commitments package offered by LSEG. The EC’s decision, notified on 13 January, follows an in depth investigation of the proposed transaction, which combines the activities of LSEG and Refinitiv. The EC said its investigation found a number of concerns about the deal but that they would be addressed, including the sale of LSEG’s Borsa Italiana, which runs the Milan stock exchange. Margrethe Vestager, the EU’s competition chief, said that infrastructure competition in trading services and access to financial data products on fair and equal terms is essential for the European economy and, in particular, for consumers and businesses.

PIMFA in the Press

Latest PIMFA Press Releases

PIMFA Press Coverage

PIMFA welcomes FCA warning on

Money Marketing: PIMFA chief -

crypto-assets but calls for more to

Lessons on leadership in lockdown

be done to protect consumers Telegraph: Bitcoin suffers 25pc slide PIMFA calls for FCA fines to

as regulator weighs in

contribute to FSCS until long term solution to the levy is agreed

Professional Adviser: Watch Interview with PIMFA's Simon

PIMFA calls for urgent reform of

Harrington on regulatory fees and

supervision & FSCS levy to protect

lobbying for change

consumers & industry as it sets out a roadmap towards lower FSCS bills

Citywire: Radical advice reforms proposed as FCA's RDR review

PIMFA disappointed to learn of

looms

supplementary costs to be levied on members by FSCS

FT Adviser: FCA releases DB transfer advice assessment tool

PIMFA sets out priorities for the future as it updates member

Money Marketing: Brexit allows UK

manifesto

to reform MiFID to boost advice sector

Latest PIMFA Consultation Response

PIMFA’s response to FCA: Call for Input on the Consumer Investment Market.

Read this and all other PIMFA consultation papers here.

EVENTS & LEARNING

PIMFA Training IS YOUR APPROACH TO VULNERABILITY FIT FOR PURPOSE? 23 February 2021 Fees: Member: £300 | Non-Member: £400 Bring a colleague along for FREE! Use code tcrewardb1g1f at checkout for a 50% discount on 2 tickets.

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

In this live online learning sessions you will learn how to: •

Interpret what the FCA’s 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

•

Adapt your firm’s products, services and processes towards the fair treatment of vulnerable clients

•

Critique, review and audit your approach to vulnerability measuring how well you serve vulnerable clients

Meet your Trainer: Caroline Wells – Customer Experience Expert As a pioneer of accessible and inclusive customer service, Caroline has worked with

people in and around financial services for over 25 years. Along the way, Caroline has led teams to win coveted awards, including Public Service Organisation of the Year, Top 100 Index, Leaders in Diversity, and was shortlisted for the National Centre for Diversity’s Most Inspirational Individual Award in 2017. Having also played a significant role at the Financial Ombudsman Service in customer experience and outreach work, Caroline Wells is now applying her customer service and complaints handling expertise as a member of the Trust’s training and consultancy team.

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

PIMFA Events PIMFA VIRTUAL FEST V2 9-10 March 2021

Following on from the HUGE success of the inaugural PIMFA Virtual Fest in June 2020, PIMFA is proud to announce the Virtual Fest V2 will be taking place on 9 & 10 March 2021.

Just like the inaugural event, the Virtual Fest V2 is a great opportunity for attendees to gain valuable insights, hear from industry experts, earn CPD hours and make connections with fellow colleagues.

We remain dedicated to supporting your continued professional development during this period of isolation. The Virtual Fest V2 will provide access to a variety of content in the forms of webinars, virtual sessions with speakers & trainers, videos, PDFs and online resources.

To view a copy of the Post-event report, including profile of attendees and a

summary of all sessions please click here.

Taking place over two days, the PIMFA Virtual Fest V2 will be delivering presentations on key areas which members have identified as their key short- and long-term focus including: •

CEO Panel – What Have we Learnt and How to do we Rebuild Together

•

The Future of Work – What do You Need to Know?

•

What Might 2030 Hold for Financial Advisers?

•

Operational Resilience: Lessons Learnt in 2020 & What’s Next in 2021

•

The Future of Regulation

•

And more…

Speakers and panellists are being carefully selected to ensure the delivery of high level content and a broad spectrum of diversity.

If you’d wish to find out more about speaking or sponsoring this event please email events@pimfa.co.uk.

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

View all other upcoming PIMFA Events and Learning here.

What's Happening In Our Industry

FCA: DB Transfer Methodology

The FCA has published its methodology for assessing DB transfer advice, as used in its most recent thematic review. This methodology is applicable for all advice given up to October 2020 when new rules and regulations came into place.

For further queries, please contact Simon Harrington.

Market Watch 66

On the 11th January the FCA published Market Watch 66, in which it sets out expectations for firms on recording telephone conversations and electronic communications when alternative working arrangements are in place, including increased homeworking. The key message was that the FCA expects firms to continue to comply with the recording obligations in the Senior Management Arrangements, Systems and Controls sourcebook (SYSC 10A), which remain the same.

The FCA expects firms to have a rigorous monitoring regime, commensurate to the increased risks, where in-scope activities may be conducted outside the controlled office environment. In particular, firms must have effective, up to date recording policies and they must be able to demonstrate to the regulator, on request, that their policies, procedures and management oversight meet the recording rules. This includes policies and procedures adopted for home working arrangements.

You can read the communication in full here.

FCA Expectations on Financial Crime Systems and Controls

The FCA expects firms to revert to their previous systems and controls from 7 February 2021 (see updated webpage). The FCA has however indicated that firms can continue to draw on the flexibility that already exists within the Money Laundering Regulation's and Joint Money Laundering Steering Group Guidance with regard to remote client verification. The examples of checks that may be used by firms set out in the FCA statement of the 6 May 2020 may continue to be used by firms, provided it is in line with their overall risk assessment and customer risk profile.

This continues to apply and is not affected by the removal of the statement overall.

Find Out More about PIMFA ...

Bulletin is just one of the many insights and publications PIMFA produces on the latest industry news and issues - most of which are accessible to PIMFA members only.

If you have a query on how to become a member firm, the work we undertake or anything in Bulletin, please contact us at info@pimfa.co.uk.

BECOME A MEMBER Find out more about becoming a PIMFA member here.

Read our membership brochure or chat to our team at membership@pimfa.co.uk.

www.pimfa.co.uk Personal Investment Management & Financial Advice Association (PIMFA) 22 City Road, Finsbury Square, London EC1Y 2AJ (registered in England No 2991400) Unsubscribe | Manage Profile | Terms and Conditions

This email was sent to NigelRS@pimfa.co.uk why did I get this?

unsubscribe from this list

update subscription preferences

PIMFA 路 22 City Road 路 Finsbury Square 路 London, EC1Y 2AJ 路 United Kingdom