PIMFA Weekly News Bulletin - 8 February 2021

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PIMFA WEEKLY NEWS BULLETIN | 8 February 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

Data Adequacy The European Parliament’s Committee on Civil Liberties, Justice and Home Affairs expressed doubts about the UK data protection adequacy in its Opinion on the conclusion of the Trade and Cooperation Agreement between the EU and UK. The Committee is particularly concerned about the UK legal framework for the onward transfers of data to third countries, exemption for the processing of personal data for immigration purposes and the retention of electronic telecommunications. The Committee says that, in order to declare the adequacy of the UK data protection framework, the European Commission’s (EC) must demonstrate that the UK provides a level of protection ‘essentially equivalent’ to that offered by EU. The EC's assessment of the UK data adequacy was not completed in time for the end of the Brexit transition period and the two sides agreed on a six month period during which the data continues to flow between the UK and EU.

UK joins the International Platform on Sustainable Finance

The Chancellor has underlined the UK’s commitment to strengthening international cooperation on environmentally sustainable finance by becoming a signatory to the Joint Statement on the International Platform on Sustainable Finance (IPSF). The UK’s membership of IPSF will support a comprehensive approach to greening financial systems, mobilising finance for clean and resilient growth, and the aims of COP26. The UK will contribute to the IPSF’s goals to scale up the mobilisation of private capital towards environmentally sustainable finance at a global level, and promote integrated markets for environmentally sustainable finance which aim to deliver on the UK's commitments to tackle climate change.

The IPSF is a multilateral forum of dialogue between policymakers that particularly focuses on initiatives in the areas of taxonomies, disclosures, standards and labels, which are fundamental for investors to identify and seize investment opportunities worldwide that truly contribute to climate and environmental objectives.The EC welcomed the UK HM Treasury as new member of the IPSF.

Share Trading Obligation - Equivalence decision for Switzerland now in force UK-Swiss stocks trading restarted on 3 February. HM Treasury’s decision under the share trading obligation (STO) for Switzerland, which was laid before Parliament on 13 January, is now in force. This decision means that UK firms can meet their obligations under the STO on BX Swiss AG and SIX Swiss Exchange AG. The Swiss have reciprocated by removing restrictions on UK trading venues. As a result, UK venues can register with The Swiss Financial Market Supervisory Authority (FINMA) in order to trade Swiss shares.

The ESAs published Final Report and draft RTS on disclosures under SFDR On 4 February the Joint Committee of the European Supervisory Authorities (ESAs) - EBA, EIOPA and ESMA - delivered to the EC the Final Report, including the draft Regulatory Technical Standards (RTS), on the content, methodologies and presentation of disclosures under the EU Regulation on sustainability-related disclosures in the financial services sector (SFDR). The proposed RTS aim to strengthen protection for end-investors by improving Environmental, Social and Governance (ESG) disclosures to end-investors on the principal adverse impacts of investment decisions and on the sustainability features of a wide range of financial products. This will help to respond to investor demands for sustainable products and reduce the risk of greenwashing. The EC is expected to endorse

the RTS within 3 months of their publication. The ESAs have proposed in these draft RTS that the application date of the RTS should be 1 January 2022.

EIOPA’s Board of Supervisors agrees on the PRIIPs KID changes

The ESAs submitted to the EC on 3 February the draft RTS on amendments on the key information document for Packaged Retail and Insurance based Investment Products (PRIIPs). Following a request from the EC in December 2020, EIOPA’s Board of Supervisors further analysed the draft RTS. While some national competent authorities at EIOPA’s Board continued to express reservations on the draft RTS, they supported the proposal based on the further details provided by the EC on their approach to the broader review of PRIIPs Regulation.

The review will examine the application of the PRIIPs framework, including how to achieve better alignment between PRIIPs, IDD and MIFID II regarding provisions on costs disclosure, the scope of products as foreseen by the PRIIPs Regulation, how to ensure that the KID contains the key information necessary for retail investors while avoiding too much or too complex information, how to allow the creation of a digitalised KID allowing layered information and reviewing the default paper basis of the KID, taking into account the specific challenges for different types of products. Following the submission to the EC, the ESAs draft RTS is now subject to adoption. If adopted by the EC, the RTS would be subject to non-objection by the European Parliament and the Council of the EU.

Index weight changes to the MSCI PIMFA Index Series

In response to quarterly survey submissions from PIMFA member firms regarding the asset allocation to Objective and Equity Risk based model portfolios, the PIMFA Indices Committee has made changes to the index weights of both MSCI PIMFA index series.

Further details can be found here:

- MSCI PIMFA Private Investor Index Series index weight changes.

- MSCI PIMFA Equity Risk Index Series index weight changes.

If you have any queries, please email indices@pimfa.co.uk.

Bank of England: UK Economy to Recover Rapidly over 2021

The UK economy avoided contraction in the last three months of 2020. UK GDP is expected to have risen a little in 2020 Q4 to a level around 8% lower than in 2019 Q4. This is materially stronger than expected in the November Report, according to the Statement issued after the Monetary Policy Committee meeting on 4 February. While the scale and breadth of the Covid restrictions in place at present mean that they are expected to affect activity more than those in 2020 Q4, their impact is not expected to be as severe as in 2020 Q2, during the UK’s first lockdown. GDP is expected to fall by around 4% in 2021 Q1, because of tighter lockdown restrictions. GDP is projected to recover rapidly towards preCovid levels over 2021, as the vaccination programme is assumed to lead to an easing of Covid-related restrictions.

UK Applies to Join Pacific Free Trade Area CPTPP

International Trade Secretary Liz Truss spoke to ministers in Japan and New Zealand on 1 February to request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), with formal negotiations set to start this year. Joining the CPTPP would deepen the UK’s access to fast-growing markets and major economies, including Mexico, Malaysia and Vietnam, for the benefit of UK business. Joining the £9 trillion partnership will cut tariffs for UK industries including food, drink and cars, whilst also creating new opportunities for tech and financial services, ultimately supporting and creating high-value jobs across the UK.

Latest PIMFA Press Releases

PIMFA calls on Industry, Government and Regulators to work together to create a future advice market that works for all

Little regulators can do to stop fraud without action from Government

Latest PIMFA Press Coverage

Portfolio Adviser: Liz Field: PIMFA prioritises FSCS reform in the year ahead

FT Adviser: PIMFA issues recommendations for 'fundamental reform'

of advice FSCS levy forecast of £1bn compensation bill is scandal that shows regulation is

Professional Adviser: 12 reforms to fix the

failing both consumers and firms

advice market: PIMFA calls on govt and regulator for changes

PIMFA welcomes FCA warning on cryptoassets but calls for more to be done to

Reuters: UK body sets billion-pound

protect consumers

budget for COVID financial firm collapses

PIMFA Financial Crime

POLITICO: London Playbook

Committee PIMFA's Consultation Responses The PIMFA Financial Crime Committee will be meeting on 12th February. The agenda will include the Committee

PIMFA’s response to FCA’s

strategy for the year ahead, an update

CP20/22 - Regulatory Fees and

from the FCA, our economic crime plan,

Levies: policy proposals for

government engagement, fraud and

2021/2022

planning for PIMFA's 2021 Financial Crime Conference.For more information,

Read this and all other PIMFA

please email Giulia Lupato.

consultation papers here.

EVENTS & LEARNING

PIMFA Events PIMFA VIRTUAL FEST V2 9-10 March 2021 FREE to attend for PIMFA Members

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 will be delivered online over two days, and is a great opportunity for attendees to gain valuable insights, hear from industry experts, earn up to 10 CPD hours and make connections with fellow colleagues.

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.

The Virtual Fest V2 agenda has been created based on the key areas members have identified as their main 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.

To view a copy of the 2020 post-event report, including profile of attendees and a summary of all sessions please click here.

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

PIMFA Training SM&CR: GETTING YOUR FIT AND PROPER ASSESSMENTS RIGHT FIRST TIME 22 February 2021 Fees: Member: £200 | Non-Member: £250 By the 31st March 2021 solo regulated firms under SM&CR will have to ensure that certified staff are fit and proper (F&P) to do their roles. The FCA FIT handbook provides some guidance to firms how this is to be achieved, but it will be the responsibility of your firm to assess whether your Certified staff are competent, capable, financially sound, and honest. Some of these concepts may seem difficult to define and will inevitably lead to questions as to how the regulators expectations should be interpreted for example, ‘when does poor performance become incompetence?’ Firms need to ensure that staff understand their responsibilities and are competent to carry out F&P assessments against clear standards, building a portfolio of evidential findings.

In this live online learning session we will help you: • Define competence and capability • Develop the skills to observe, listen and capture evidence all at the same time!

• Conduct a feedback session • Build a portfolio of evidence to demonstrate an individual’s competence and capability • Build a development plan that is SMART.

Who should attend?

Anyone who is about to be or has been recently appointed into a role that requires skills in assessing the competence and capability of others. It can also serve as a refresher for those in existing positions.

It is ideal for those caught within the scope of the Certification Regime performing a role of supervisor and/or are responsible for the assessment of another individual’s fitness and propriety.

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

View all other upcoming PIMFA Events and Learning here.

PIMFA Member Only Guides

PIMFA's member only guide on Remuneration has been updated.

View this and all the latest member only guides here (login required).

PIMFA Plus Partner Mitigo: 6 Cybersecurity Resolutions for your Business

The need to allocate budgets and resources to mitigate known risks has never been more important. Cybercrime, with its ever-increasing prevalence, is one of those risks and the beginning of a new year is always a good time to start planning. In that context, PIMFA Plus partners, Mitigo, outline 6 cybersecurity resolutions for your business which you can read here.

FCA Sets Out General Approach to International Firms

The FCA has set out its general approach to international firms providing or seeking to provide financial services that require authorisation in the UK. The FCA is not changing existing rules but explaining how it will assess international firms against minimum standards when they apply for authorisation and during ongoing supervision, as well as the FCA’s expectations for these firms. The document also sets out the circumstances where these international firms could present higher risks of harm and how those risks can be mitigated.

This approach document is relevant for international firms that require authorisation in the UK, including those that have applied or intend to apply in the future, and those that are already authorised in the UK. This document supplements existing policy statements and guidance, as well as the FCA’s Handbook.

FCA Directory Persons Submission: Show and Tell sessions for solo-regulated firms

The deadline for submission of information about Directory persons to the Register is the 31st March 2021. If you are using the multiple add template (for 10 or more persons) then you need to submit this by the 18th March 2021.

The FCA is running a series of ‘Show and Tell’ sessions which intend to: •

Give a background to the Directory Persons programme and firms’

responsibilities •

Provide an overview of the firm journey

•

Demonstrate a single and multiple submission

•

Take questions and answers

The sessions will take place via Teams on 9 February (10am-11am) and 25 February (11am-12pm). If you would like to attend, please email AlexandraR@pimfa.co.uk

FCA issues Warning over ‘Clone Firm’ Investment Scams

With Action Fraud data revealing a loss of £78 million ‘in clone firm’ investment scams, the FCA has issued a warning as part of its ScamSmart Campaign to help investors avoid fake firms. The FCA is advising anyone considering an investment opportunity to check the Warning List of firms and not to deal with firms not authorised by the FCA. Investors should also check the firm’s details on the FCA Register. You can read the FCA page in full here.

Have a go at the Scam Game! Can you spot an investment scam from a smart investment by taking the Scam or Smart quiz?

Pre-Paid Funeral Plan Regulation

The FCA are taking responsibility for regulating the pre-paid funeral plans sector, and they expect to begin in summer 2022. They have published information for funeral plan providers and intermediaries, explaining what their regulation means for them and how to get ready. To find out more visit their website.

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