PIMFA Weekly News Bulletin - 2 October 2020

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PIMFA WEEKLY NEWS BULLETIN | 2 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,

In this edition of Bulletin, you will find the latest industry news, information on the impact of Covid-19 and other key issues PIMFA are working on for our members. We remain committed to representing our members, effecting meaningful change and being a key point of useful information. If there is anything in this newsletter, or in general that you have questions on, or that we can help you with, please contact us at enquiries@pimfa.co.uk.

LATEST NEWS

UK – EU FTA talks

New UK negotiating proposals

Commenting the ongoing UK – EU trade

The EU has confirmed they have received

talks, Prime Minister Boris Johnson’s

five new negotiating documents from the

spokesman said on Friday that the UK

UK government which cover crucial areas

“wants a resolution as quickly as possible

of disagreement in the Brexit negotiations:

which is why the PM is talking to Ursula

fisheries, law enforcement and judicial

von der Leyen tomorrow to discuss next

cooperation, energy, including civilian

steps. Our ambition remains the same, but

nuclear cooperation, mobility and social

we are also clear that we need to give

security coordination and the “level

businesses the time they need to prepare

playing field” issues of competition and

for the end of the transition period which is

State Aid rules. It has been reported that

why we see the middle of October as an

the documents on State Aid and the level

important time to reach an agreement by.”

playing field offer to set out principles on controlling domestic subsidies, but that

German Chancellor Angela Merkel said on

they do not provide governance proposals

Friday there was no breakthrough in the

that would allow the EU to hold the UK to

negotiations but she remained optimistic

its commitments. The EU’s approach to

that a deal on a new trade relationship

the negotiations has been to agree a deal

post Brexit transition was still possible

that would allow the bloc to suspend parts

before the end of the year.

of the trade deal if there are any breaches of the agreed terms.

EU legal proceedings against UK

The papers also reportedly contain a suggestion to agree a three year transition for the fishing industry which would allow time to adjust to the “zonal attachment”

The EU has begun legal proceedings against the UK over the provisions in the Internal Market Bill that seek to override the Northern Ireland Protocol. The EU

approach to quotas, which is based on where fish swim. Also this week, the UK has introduced a statutory instrument in Parliament to remove the EU state aid

starting the infringement procedure

legislation from UK law after the end of the

against the UK through a letter of ‘formal

transition period.

notice’, is a procedural step. The letter does not establish that the UK has broken the law, but does set out that the EU believes that through the provisions on the NI Protocol in the UK Internal Market Bill, the UK ‘has breached its obligation to act

Legal advice for post Brexit transition cross border trade in financial services

in good faith, as set out in Article 5 of the Withdrawal Agreement’. The EU has for the time being not walked away from the negotiations and is, for now, just ratcheting up political pressure.

The negotiations on the terms of the future relationship between the UK and EU are ongoing but regardless of the outcome of

If, however, no deal is reached in the talks and the UK does go ahead and implement the Internal Market Bill, then the EU will likely move forward with arbitration or legal action through the provisions in the Withdrawal Agreement.

the talks, PIMFA firms with an EU footprint will need to adjust to operating from a third country in relation to the EU after the transition period ends and decide how to access and operate on behalf of clients living in the EU. With passporting lost and no equivalence available in the retail investment sector, the options for PIMFA firms to continue cross-border trade with

Equivalence latest

the EU are limited and mostly dependent on the approaches adopted by national regulators in the EU Member States.

Equivalence will affect around 40 areas of UK financial services at the end of the transition period. The UK government has produced 2,500 pages of detailed EU questionnaires in an attempt to be granted equivalence decisions and access to the EU Single Market for the financial services industry from 1 January 2021. However, in July the Commission unexpectedly said it had not initiated an assessment in the most important areas of equivalence because its own rules were changing and

We would like to hear from firms if they wish to obtain legal advice from a law firm on options available to them for servicing clients in the EU once the UK has left 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.

were still a work in progress.

PIMFA Compare My Allocations The EU’s recent deregulation of financial

report

markets in the wake of the coronavirus crisis has made the UK rules stronger but the situation raises the prospect that UK investment firms will have to rely on agreements between the UK and national supervisors in the EU Member States.

Andrew Bailey, Governor of the Bank of England, said in a recent British Chamber of Commerce Webinar that “the process of trying to agree equivalence has not gone

“How do my firms’ strategic asset allocations compare to others?” Find out with the PIMFA CMA report, which is FREE for PIMFA members.

To receive your firms’ copy, please email indices@pimfa.co.uk

very far” and that “equivalence is not on the table in the biggest areas”. Bailey said that the UK will not modify its rules to obtain equivalence making it clear that

Forthcoming PIMFA Committee Meetings

“rule-taking is not going to happen. To be blunt, this is going to take a different approach if we are going to get there

The following committee meetings will be

because that is not a price we should pay

taking place in the coming weeks:

for this.”

Week commencing 5th October: 6th October - Business Forum Cyber Security - free assets

7th October - SME Business Forum

available from City of London

8th October – Operations Committee

Police Week commencing 12th October 13th October – Regulatory Committee The City of London Police’s CyberGriffin

15th October – Strategic Advisory Group

cyber security specialists have in place a number of digital offerings on cyber security. All are free resources, and we

25% Off All Harriman Books -

invite members to use them as they see

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fit.

These include:

•

•

the home working video series –

In partnership with Harriman House,

Bites size videos colleagues can

PIMFA is delighted to offer members an

watch to assist members in

exclusive 25% discount on high quality

making sure they are safe whilst

books from over 300+ titles in print, eBook

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four services for firms: briefings,

here.

tabletop exercises, incident response training and cyber capability assessment.

Please click here to sign up.

UK expats in the EU – bank accounts

Following the reports that customers of UK banks living in the EU have begun to receive letters informing them that their current accounts will be closed once the transition period with the EU ends on 31 December 2020, Mel Stride, Chair of the Treasury Committee, has asked Chris Woolard, Interim Chief Executive of the FCA, to set out expectations for how much notice firms must provide such customers with, should they decide to close their customers’ accounts and how the FCA intends to make sure that firms provide customers with sufficient notice prior to account closures in order to allow those affected to make suitable arrangements. Mel Stride said in his comments that it is vital that UK expats in the EU are given sufficient warning so that they have time to make alternative arrangements.

Request to firms: evidence gathering on scams and investment fraud

PIMFA would like to produce a useful guide for firms on scams and investment frauds. The guide will collate on an anonymised basis different types of scams and frauds experienced by firms and hopefully be a useful tool in combating this type of criminal activity.

We would therefore be very grateful if you could provide us with as much detail as possible

on scams and frauds you have come across. This could be in the form of case studies, scenarios, screen shots of cloned websites or Instagram ads.

If you are able to help, please get in touch with Alexandra Roberts or Giulia Lupato.

Latest PIMFA Blogs & Press Releases

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 PIMFA welcomes Government consultation into greater regulatory oversight of financial promotions Blog: ESG and Covid 19

EVENTS & LEARNING

The PIMFA ESG Academy, which launched on 15th September 2020, is a self-paced online programme that 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 PIMFA ESG Academy, supported by Morningstar, is our response to the growing demands by advisers for an immersive, engaging, CPD-approved learning experience that supports them in making the most of the growing ESG opportunity by having more effective ESG conversations with their clients.

Please click here to find out more.

PIMFA Webinar: The Power of Partnership: How to develop mutually beneficial relationships that lead to career success 7 October You’re well aware that networking and building relationships is important for your career.

And, you know how the quality of your relationships with others in the workplace

can have a massive impact on how much you enjoy your working day.

Join Caroline Holt, the UK’s go-to expert on the Imposter Syndrome, on Wednesday 7th October from 12.30 to 13.30 for an exploration of The Power of Partnership. In this interactive webinar, we will look at what’s going on when relationships are difficult. And, what needs to be in place in order to develop mutually beneficial partnerships – ones which facilitate collaboration and where trust and respect prevail.

For more info and to book your place, please click 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 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 practioner 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 that provides a high degree of confidence that conduct rule breaches will be identified, a new and different 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 rolespecific 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 Online Event The Financial Adviser Virtual Forum 25 November The IFA Virtual Forum will be an opportunity for IFA professionals to hear from experts and the PIMFA Policy teams 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.

Mitigo Cybersecurity: warning members of a rise in ransomware attacks

Firms that suffer a cyber-attack can take a hit to their operations, bottom line and ultimately

their reputation may suffer so badly the business never recovers.

Since the onset of the Covid-19 pandemic numerous authorities including the newly created National Cyber Security Centre (NCSC), have warned of a surge in cyber-attacks across various industries; with the financial services industry among the most heavily targeted.

To protect its members against this increasing threat, PIMFA has appointed Mitigo Cybersecurity as a PIMFA Plus partner. Mitigo’s expertise provides PIMFA members protection from cyberattacks, enhances operational resilience and data security, and offers legal and regulatory compliance.

It comes amidst an alarming new trend in ransomware attacks where hackers use malicious software to encrypt a company’s data and deny the firm access to its own information. The criminals then demand a ransom, promising to provide the decryption key.

Ransonware attacks have grown threefold in the last year, with £135,000 ransom paid on average to hackers. But the criminals are now stealing a copy of firms’ data as a first step, before encrypting the original version on their system. The hackers then have two ransom opportunities. Firstly, demanding payment for the decryption key. Secondly, threatening to publicly release, piece-by-piece, confidential data unless they are paid again.

Mitigo’s support has been designed to offer a proportionate, affordable, ongoing security solution, to safeguard firms against cybercrime. This includes a dedicated expert client helpdesk and sandbox to which suspicious content may safely be sent.

For a free, no-obligation consultation from Mitigo please call 0208 191 9913, email pimfa@mitigogroup.com or visit www.mitigogroup.com/pimfa.

PIMFA In the Press

FT Adviser: 'Broken regulation' must be fixed, industry warns Professional Adviser: Advisers underestimate client interest in ESG – research FT Adviser: Abridged advice launches to frosty reception Financial Adviser: Pimfa warns of 'alarming' trend in ransomware attacks FT Adviser: Gearing up for the battle on regulation Money Marketing: Inside the fight for fairer regulatory fees

Latest PIMFA Consultation Responses

PIMFA’s latest consultation response is to HM Treasury regarding their consultation on expanding the Dormant Assets scheme

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

WHAT'S HAPPENING IN OUR INDUSTRY

FCA updates their Financial Crime Guide

Following the March Quarterly Consultation paper, the FCA have now published changes to their Financial Crime Guide which brings it up to date to reflect amendments made to the MLRs in January 2020 and take effect from today, 1 October. Details are set out in the September Handbook Notice. These changes are consequential ones and not intended to provide substantive guidance/ interpretation on the MLRs.

FCA: Extension of forbearance with regard to 10% depreciation notifications

This statement is for firms providing portfolio management services or holding retail client accounts that include positions in leveraged financial instruments or contingent liability transactions. It outlines a further 6-month extension and amendments to a temporary coronavirus (Covid-19) measure which FCA issued in March.

The statement can be read here.

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