PIMFA Weekly News Bulletin - 6 April 2021

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PIMFA WEEKLY NEWS BULLETIN | 6 April 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

UK - EU agree a Memorandum of Understanding in Financial Services On 26 March the Treasury issued a statement confirming that the technical discussions on the text of the Memorandum of Understanding (MoU) between the UK and EU have now been concluded. The two sides still need to take formal steps before the agreement is signed but it is expected that this can be done expeditiously. The UK and EU agreed to establish a durable and stable relationship in financial services between the two autonomous jurisdictions based on a shared commitment to preserve financial stability, market integrity, and the protection of investors and consumers in a Joint Declaration on Financial Services Regulatory Cooperation, alongside the Trade and Cooperation Agreement, which was agreed in December last year.

The MoU creates the framework for voluntary regulatory cooperation in financial services between the UK and the EU and is similar to the existing deal between EU and the US. It establishes the Joint UK-EU Financial Regulatory Forum, which will serve as a platform to

facilitate dialogue on financial services issues. While the MoU represents a step in the right direction, it does not re-establish the EU market access for the UK financial services sector. According to reports, the MoU commits the two sides to meet twice a year, or whenever considered necessary, and to share information on regulatory developments that may have a significant impact on the financial services sector in either jurisdiction. The framework also allows for transparency and dialogue on the UK and EU decisions to grant or withdraw equivalence.

Letter from Chancellor Rishi Sunak and Business Secretary Kwasi Kwarteng to Businesses on the Government’s Plan for Growth Explaining the Government’s Plan for Growth in a letter to businesses, published on 30 March, Chancellor Rishi Sunak and Business Secretary Kwasi Kwarteng say that the UK’s economic environment has changed, "bringing new opportunities and challenges for businesses". As the Government forges a new path outside of the EU and continues to fight the COVID-19 pandemic, their central economic focus is on creating and supporting jobs and helping drive growth in existing, new and emerging industries. Three pillars of investment - infrastructure, skills and innovation - are the foundation of their approach to economic recovery as they outline below:

"1) Investing in infrastructure drives long term productivity improvements, and in the short term stimulates economic activity - the government has already announced record investment in broadband, flood defences, roads, rail and cities as part of the plans to spend £100 billion on capital next year and more than £600 billion on gross public sector investment over the next 5 years; 2) the best way to improve people’s life chances is to give them the skills to succeed - the government is transforming Further Education and building an apprenticeships revolution; 3) Innovation drives economic growth and creates jobs – the Government will make the UK the best place in the world to start and grow a business by having access to capital, skills and ideas, as well as a smart and stable regulatory framework".

Treasury Committee launches ‘Jobs, Growth, and Productivity after Coronavirus’ inquiry

The Treasury Committee has launched a new inquiry into jobs, growth, and productivity after coronavirus. The Committee will examine how the Government can reduce and mitigate economic scarring and job losses after the pandemic, how much difference the Government can make to economic growth, and what has caused the UK’s productivity growth to be persistently weak. It will also examine macroeconomic policy, looking at whether the Bank of England’s inflation target is fit for purpose, if the Monetary Policy Committee has effective tools to stimulate the economy when interest rates are low, and whether a return of inflation is a risk to the economic recovery.

The deadline for submitting written evidence is Monday 17 May.

ONS Quarterly Economic Commentary

The Office for National Statistics has published its quarterly economic commentary, covering October to December 2020. There was a 9.8% contraction in the UK economy in 2020, while the third national lockdown and the transition to the new trading relationship of the Trade and Cooperation Agreement (TCA) have had an impact on output produced and trade flows in early 2021. The coronavirus pandemic has led to large movements in the income and expenditure of households, corporations, the government and the rest of the world in 2020, as well as financial flows. The number of payrolled workers declined by 693,000 between February 2020 and February 2021 and 4.7 million employees furloughed as of the end of February 2021 that are mostly concentrated in the accommodation and food service sectors, and wholesale and retail trade industries.

PIMFA Responds to Treasury's Consultation on IFPR

PIMFA have published their response to HM Treasury’s consultation on the implementation of the Investment Firms Prudential Regime and Basel 3 standards.

We support the view that the FCA should have primary responsibility for the orderly failure of FCA Solo-Regulated investment firms which are, currently, within scope of the BRRD.

Read the full response here. You can also read our latest press release in IFPR here.

Latest PIMFA Press Releases

PIMFA warns firms to prepare for the scale and impact of post-Brexit regulations

Latest PIMFA Press Coverage

Sunday Telegraph: MPs accuse Google of 'immorally' profiting from pension scam adverts

PIMFA welcomes enhancements to consumer protection laid out in new Work and Pensions Committee Report on pension savers and

Citywire: FCA boosts whistleblower protection in reform push

scams FT Adviser: Advisers question FCA's optimism PIMFA welcomes FCA Feedback Statement on

on PI issues

Open Finance The Fintech Times: The Latest Stories PIMFA joins Which? and others in call to tackle growing threat from online scams

Corporate Adviser: Regulators set to heap post-Brexit rules on financial advice industry

PIMFA welcomes continued relaxation of 10%

- PIMFA

rule and consultation on permanent change Citywire: Podcast - Internet giants profiting PIMFA backs calls for financial harm to be

from gov't inaction on online scams

included in Government’s Online Safety Bill Wealth Adviser: PIMFA welcomes enhancements to consumer protection in Work and Pensions Committee Report

PIMFA Quarterly Asset Allocation Survey Opens 6th April!

The Q2 2021 PIMFA asset allocation survey opens on Tuesday 6th April.

Complimentary peer group comparison reports are available to all participating PIMFA member firms.

To find out more, email indices@pimfa.co.uk.

EVENTS & LEARNING

FINANCIAL CRIME & CYBER RESILIENCE CONFERENCE 2021 21-22 April 2021 Join us for this year's 2 day virtual Financial Crime & Cyber Resilience Conference.

Attendees will be able to join leading industry debates and hear from Financial Crime and Cyber Security experts across the across the regulatory, provider, law enforcement and innovation

space.

All sessions are eligible for CPD and will have online Q&A's to give you the chance to get involved LIVE, and then be available on demand after the event. We are delighted to announce that our latest keynote speakers are: •

Dr Claudia Natanson, Chair – UK Cyber Security Council

•

Louise Marshall - EU Exit, Governance, Engagement, Operational Policy and Litigation – OFSI

For more info and to book, please click here.

PIMFA Webinar PROFESSIONAL INDEMNITY INSURANCE – THE FULL STORY 2021 27 April 2021 FREE to attend This 60 minute webinar will focus on the subject of Professional Indemnity Insurance for Wealth Managers from three perspectives: •

The insurers looking at historic claims trends and losses, underwriting profitability, capital dynamics and the Lloyd’s review.

•

The lawyers examining potential liability trends to come and how they might transpire, regulatory behaviours, litigation & legislation and sector challenges – such as ESG.

•

The brokers exploring practical coverage challenges as insurers look to restrict the coverage scope, market challenges in terms of insurer behaviours and navigating premium increases.

For more info and to book, please click here.

View all other upcoming PIMFA Events and Learning here.

Future FCA Consultation on Strengthening Investor Protections in Special Purpose Acquisition Companies

The FCA has confirmed that it will be consulting shortly on amendments to its Listing Rules and related guidance to strengthen protections for investors in Special Purpose Acquisition Companies (SPACs). The consultation will consider the structural features and enhanced

disclosure, including a minimum market capitalisation and a redemption option for investors, required to provide appropriate investor protection. The proposals will help to ensure that SPACs operate within a framework of high regulatory standards and oversight.

Where such protections are in place, the FCA considers that the existing presumption of suspension of the listing for such companies at the point of announcement of an acquisition target is no longer required and therefore intends to consult on this basis, aligning this element of its rules more closely with other major jurisdictions.

The consultation will be open for a 4-week period and will welcome views from the full range of stakeholders. The FCA aims to publish the new rules and/or guidance by early summer.

FCA Publish Final Rules on Building Operational Resilience

The FCA, alongside the Bank of England and the Prudential Regulation Authority, have published their final rules on building operational resilience in the financial sector. Key concepts include FCA's requirements, timelines and scope.

The final rules and guidance can be read here.

FCA Covid-19 Impact Survey returns

The FCA's Covid-19 Impact Survey is being repeated for a fourth time and they are planning to send this survey to the relevant firms in Tranche 1 on one of the following dates:

Batch 1: to be sent on 12 April 2021 - response due by 3 May 2021 Batch 2: to be sent on 13 April 2021 - response due by 4 May 2021 Batch 3: to be sent on 14 April 2021 - response due by 5 May 2021 Batch 4: to be sent on 16 April 2021 - response due by 7 May 2021

They will send a warm-up/introduction email to all the firms at least 1 day prior to them receiving the survey.

Completion of the survey is mandatory under section 165 of the Financial Services & Markets Act (FSMA) 2000

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.

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

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