PIMFA Weekly News Bulletin - 25 October 2021

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PIMFA WEEKLY NEWS BULLETIN | 25 October 2021 Dear Nigel,

Welcome to the PIMFA Bulletin; grab a coffee and take 10 minutes to read the latest news impacting you and your firm.

DIVERSITY & INCLUSION AWARDS | WINNERS ANNOUNCED

Many congratulations to the winners of our inaugural Diversity & Inclusion Awards and we would also like to thank our judges, sponsors and all of our other fantastic entrants - we hope you will enter again next year.

The level of entries for the inaugural awards was exceptional and our judges were delighted to read about some of the great work being carried out within our industry. The process was particularly difficult and we hope that this standard is maintained and built upon for 2022, and that these awards continue to provide an opportunity for us to share ideas and experiences to inspire and develop a diverse and inclusive industry.

Shoosmiths LLP report on the FCA’s new Consumer Duty

In May of this year, the Financial Conduct Authority (FCA) published its first consultation paper - CP21/13: A new Consumer Duty - on the proposed introduction in 2022 of a new regime which will set clearer and higher expectations for firm’s standards of care towards consumers. PIMFA responded to this in July.

All firms connected with the provision of retail financial services need to have a clear understanding as to the extent to which they may be affected by the introduction of the new regime. In view of this, Shoosmiths LLP, an Associate Member of PIMFA, has formed a “Consumer Duty Group” which has released a report – “The FCA’s New Consumer Duty” – highlighting particular issues of relevance to PIMFA member firms and to expand on some of the concerns identified by PIMFA in its response to CP21/13.

The report can be read in full here.

Investment Firms Prudential Regime (IFPR) final rules published

On the 22nd October the FCA converted the near-final rules from the first two policy statements of the Investment Firms Prudential Regime (IFPR) into final rules. The third Policy Statement hasn’t been published yet.

The publication also includes a Remuneration Policy Statement Template and a Template that firms can use to record their Material Risk Takers.

All information is available here.

PIMFA MSCI Index Series – New asset allocations effective from 01.12.2021

The PIMFA Indices Committee have made changes to the portfolio weights of the MSCI PIMFA Index Series’. Changes below will be effective from Wednesday 1st December.

MSCI PIMFA Private Investor Index Series

MSCI PIMFA Equity Risk Index Series

For further details please contact us at indices@pimfa.co.uk

Latest PIMFA Press Releases

FCA must focus attention on transformation programme following departure of Chair Charles Randell

Latest PIMFA Press Coverage

Daily Telegraph: Bitcoin hits new all-time high of $66,000 – is it still worth buying?

PIMFA delighted to announce winners in first Diversity & Inclusion Awards

Professional Pensions: FCA calls for stronger

PIMFA welcomes industry guide helping advice firms to structure their relationships with Discretionary Investment Managers

Citywire New Model Adviser: All the winners

GoSimpleTax becomes latest PIMFA Plus Partner – offering firms a tailored tax solution for clients

IFA Magazine: Congratulations to the winners

Online Safety Bill measures

from Pimfa's diversity and inclusion awards

of inaugural PIMFA Diversity & Inclusion Awards

PIMFA calls for fundamental review of PRIIPs regime rather than a ‘sticking plaster’ approach Investment Week: Industry questions 'unusual' departure of Charles Randell from FCA

PIMFA's Latest Consultation Responses

PIMFA’s latest Consultation Response is to the FCA CP 21/28 on the New Cancellation and Variation Power; Changes to the Handbook and Enforcement Guide Read this and all other PIMFA consultation papers here.

EVENTS & LEARNING

Operational Resilience for Firms

25 November | Click here to register

This half-day PIMFA Virtual event with PwC on Operational Resilience will offer attendees great insights on topics including: •

Executive and Board engagement on operational resilience (and the self-assessment)

•

Operational resilience meets financial resilience: how ICARA fits with the operational resilience

•

Managing your third parties

•

Testing your resilience: the importance of robust scenario testing

•

Level of sophistication” how much is enough?

Click here to register

FINANCIAL PROMOTIONS: LATEST DEVELOPMENTS & REFRESHER SESSION

28 October | Click here to register This 3-hour online session will refresh participants’ knowledge of the financial promotion rules, update them on the outcome of the Treasury’s consultation and explore its practical implications.

It is suitable for compliance officers, marketing directors and in-house counsel at FCA authorised firms, regulatory lawyers and corporate finance practitioners. Participants will gain an indepth understanding of the financial promotion rules and their practical effects for authorised firms and companies.

Click here to register

View other upcoming PIMFA Events and Learning here.

UK agrees historic trade deal with New Zealand

The UK and New Zealand have agreed free trade deal which will be a boost to British exporters. This comprehensive trade agreement will cut red tape for businesses, end tariffs on UK exports and create new opportunities for tech and services companies, while making it easier for UK professionals to live and work in New Zealand.

UK-New Zealand trade was worth £2.3 billion last year and is set to grow under the deal.

Financial and insurance services companies will benefit from greater access to New Zealand’s market and easier digital trade and business travel and will also remove barriers to trade and deepen access for the UK’s advanced tech and services companies, while making it easier for smaller businesses to break into the New Zealand market.

FCA: Young investors driven by competition and hype

To coincide with the launch of its InvestSmart campaign, to help new investors understand the risks they may be running, new research from the FCA has found that many are driven by competition and influenced by hype. The FCA survey of 1,000 people aged 18 to 40 who invest in high-risk investment products, has found that 76% have felt a sense of competitiveness when placing their money in an investment, with 68% likening it to gambling. 21% were considering holding their most recent investment for more than a year, and 8% for more than 5 years. This is despite 60% of those surveyed saying that they prefer more stable returns than investments that rise and fall dramatically.

Hype on social media and in the news is driving new investors to take up high-risk investments - 58% of respondents agreed that constantly hearing about a certain investment on the news, on social media and from other people encouraged them to purchase specific investments. A majority of those who purchased forex or crypto (57% and 69% respectively) incorrectly believed these to be regulated by the FCA. As a result, they were unlikely to understand the lack of investor protection and the risk to their money.

The campaign targets those who are inexperienced at investing, possibly dipping their toe for the first time. The FCA has joined forces with Olympic BMX gold medallist Charlotte Worthington, who is highlighting the pitfalls of high-risk activities, and the need for proper preparation before attempting them. The campaign asks investors to consider their appetite for risk and to ignore the hype, directing them instead to advice available on the FCA’s website.

The campaign is part of the FCA’s consumer investments strategy, which was launched in September. This aims to give consumers the confidence to invest, supported by a highquality, affordable advice market leading to fewer people being scammed or persuaded to invest in products too risky for their needs.

UK's path to net zero set out in landmark strategy

A landmark strategy, setting out how the UK will secure 440,000 well-paid jobs and unlock £90 billion in investment in 2030 on its path to ending its contribution to climate change by 2050, was unveiled by the UK government on 19 October 2021.

The UK Net Zero Strategy sets out a comprehensive economy-wide plan for how UK businesses and consumers will be supported in making the transition to clean energy and green technology – lowering the UK’s reliance on fossil fuels by investing in sustainable clean energy in the UK, reducing the risk of high and volatile prices in the future, and strengthening our energy security. The strategy will support the UK in gaining a competitive edge in the latest low carbon technologies and in developing thriving green industries in our industrial heartlands – from carbon capture to hydrogen, backed by new funding.

It comes as the UK prepares to host the UN COP26 summit next week, where the Prime Minister will call on other world economies to set out their own domestic plans for cutting emissions.

Greening Finance: A Roadmap to Sustainable Investing

HM Treasury has published a report - ‘Greening Finance: A Roadmap to Sustainable Investing’ - setting out the government’s long-term ambition to green the financial system and align it with the UK’s net-zero commitment.

This will happen in three phases: Informing – ensuring decision-useful information on sustainability is available to financial market decision-makers; Acting – mainstreaming this information into business and financial decisions and Shifting - financial flows across the economy need to align with a net-zero and nature-positive economy.

The document focuses on the first phase, which will be delivered through new economywide Sustainability Disclosure Requirements. It sets out implementation pathways for different sectors of the economy and provides more detail on the requirements.

The report can be read here.

UK unveils Presidency Programme to drive global climate ambition at COP26

The UK government has unveiled its programme of Presidency events for the two-week COP26 Summit, which is taking place in Glasgow from 31 October - 12 November. The programme kicks off with a World Leaders’ Summit (1-2 November), hosted by UK PM Boris Johnson, for which more than 120 leaders have already confirmed their attendance.

They are encouraged to set out ambitious actions to reduce emissions - including net zero and on coal, cars, and trees, scale-up action to adapt to the impacts of climate change and mobilise finance, and to collectively signal their commitment to keeping alive the crucial Paris Agreement aim of limiting global temperature rises to well below 2C, and as close as possible to 1.5C.

Running alongside the formal negotiations, the two-week programme of Presidency events will put a spotlight on how all parts of society and the global economy drives ambitious climate action. Events fall across key themed days including finance, adapting to the impacts of climate change, energy transition, nature and land-use, gender, and youth.

Chancellor Rishi Sunak will open the first of the themed days, with an event on how finance is being made available to deliver on the goals of the Paris Agreement.

Lord Mayor calls on City of London to lead global charge to net zero

The Lord Mayor of the City of London William Russell has called on firms across the Square Mile to play their role in helping countries across the world mitigate climate change.

Speaking at a Guildhall event on 18 October 2021, attended by HM Chancellor and senior Government and business figures ahead of the Global Investment Summit, the Lord Mayor told attendees that the City of London can ensure the net zero transition is 'financed, implemented and sustained'.

"We do not just want to reach net zero here in the City, we want the City to help you achieve net zero across the world," the Lord Mayor said. "Not only is this one of the few global centres with a workforce of people who have been working on green finance for years, but the UK is also securing its future green talent pipeline."

The remarks come in advance of next month’s UN Climate Change Conference COP26 in Glasgow, where the City of London Corporation, alongside the Green Finance Institute, is holding the Green Horizon Summit. The event will bring together senior figures from the financial and professional services sector across the world to discuss how best to mobilise finance in the transition to net zero.

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