PIMFA Weekly News Bulletin - 8 August 2022

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PIMFA Weekly News Bulletin

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PIMFA WEEKLY NEWS BULLETIN | 8 AUGUST 2022 Requirement to register Trusts by 1 September 2022 and HMRC guidance

The rules in relation to the registration of trusts are changing, with almost all trusts (unless specifically excluded) having to be registered with the Trust Registration Service (TRS) by 1 September 2022.

Section 30A of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 requires a ‘relevant person’, an obliged entity, as part of Customer Due Diligence (CDD) measures, to check whether a trustee seeking to enter a business relationship with them, that is to become their client, has registered their trust on the TRS, assuming that trust is not exempt from registration. Failure by an in-scope trust to register on TRS would in itself constitute a discrepancy that must be reported to HMRC. Obliged entities must therefore be satisfied that they meet their requirements under this regulation in the process of conducting business.

Members should ensure that their trustee clients are aware of the new registration requirements. We have created a guide specifically aimed at our firms’ trustee clients to make them aware of the new rules and help them out in the process of registration.

VIEW THE GUIDE

VIEW HMRC GUIDANCE FOR OBLIGED ENTITIES IN RELATION TO DISCREPENCY REPORTING

MiFID II Transaction Reporting - A list of issues

During the implementation of MiFID II and thereafter, PIMFA ran a series of MiFID II Transaction Reporting Working Group (TRWG) meetings, which provided an opportunity for PIMFA Members and Associates to raise the questions and concerns about the new additional Transaction Reporting requirements, which were introduced in January 2018.

The TRWG engaged with the FCA's Markets Reporting Team, who were very helpful in providing assistance, explanations and useful insights into the new requirements.

We understand the FCA is now considering a consultation paper on MiFID II Transaction Reporting, which may in due course lead to changes in the reporting regime.

With this in mind, we re-convened the TRWG, reviewed the outstanding issues and asked firms to provide details of any new concerns.

The MiFID II Transaction Reporting list of issues paper is a summary of those issues, as well as some suggested changes identified during and post implementation which we believe could help firms to improve the quality of their Transaction Reporting and deliver better quality data to the FCA, who would then have a clearer and more accurate picture of reporting, making it easier to identify errors, omissions and potential cases of market abuse.

The paper has been sent to the Markets Reporting Team at the FCA for their consideration.

DOWNLOAD THE PAPER

FCA CP22/14 - Broadening retail access to the longterm asset fund CP22/14 sets out proposals for broadening the range of retail investors able to access this new type of fund.

LTAFs are currently classified as "non-mainstream pooled investments" and can only be made available to

FCA finalise rules on the promotion of high-risk investments The FCA has published its policy statement on improvements to the financial promotions regime.

PIMFA has been engaging extensively with the FCA on this area as well as government (the approvals gateway

retail investors categorised as sophisticated or high net

has been legislated for in the Financial Services and

worth.

Markets Bill) and are broadly very happy with the outcome of this consultation process. In short, the policy

The CP22/14 proposals will see LTAFs re-classified as

statement makes changes to the following areas:

"restricted mass market investments" under the rules just published in PS22/10. This means that, in future,

•

Classification of high-risk investments: the

firms will be able to recommend LTAFs to advisory

FCA has rationalised rules in COBS 4 under

clients, subject to suitability and so long as mandated

the terms ‘Restricted Mass Market

risk warnings/risk summaries are provided.

Investments’ and ‘Non Mass Market Investments’

For non-advised investors, promotion of LTAFs will

•

The consumer journey into high risk

require the distributing firm to provide a personalised

investments: changes have been made such

risk warning/risk summary, undertake an

as the strengthening of risk warnings, banning

appropriateness assessment and ensure that the client

inducements to invest in some cases,

is certified as a sophisticated, high net worth or

introducing positive frictions in the journey,

restricted investor.

improving client categorisation and introducing stronger appropriateness tests.

PIMFA intends to respond to the paper which is open for

•

Strengthening the role of firms approving

comment until 10 October 2022. If you have any

and communicating financial promotions:

comments/questions on the CP or points to contribute to

The FCA has introduced rules to strengthen

our response, please contact Sarah McGuffick.

the role of s21 approvers as well as the role of firms communicating financial promotions in

Click here to view.

displaying appropriate levels of expertise in the product being promoted.

Please contact Simon Harrington should you have any questions.

FCA publish rules on Improving the Appointed Representatives regime The FCA has published its policy statement on improving the appointed representatives regime. We are happy that the policy statement includes some notable concessions that PIMFA has pushed the FCA albeit there still remain areas we consider will be problematic for Principals going forward.

A summary of changes to the policy are outlined in the first few pages of the policy statement. Should you have any queries please contact Simon Harrington.

Marketing of high risk investments

•

1 August The FCA finalised stronger rules to help tackle misleading adverts that encourage investing in high-risk products: FCA clamps down on marketing of high-risk investments to consumers

•

The new rules will not apply to crypto asset promotions

•

Once the Government and Parliament confirms in legislation how crypto marketing will be brought into the FCA's remit, the FCA will publish final rules on the promotion of qualifying crypto assets

•

These rules are likely to follow the same approach as those for other high-risk investments

UK-U.S. Financial Regulatory Working Group

•

26 July HMT published a Joint statement on the UK-U.S. Financial Regulatory Working Group meeting

•

The Working Group was formed in 2018 to deepen bilateral regulatory cooperation with a view to the further promotion of financial stability; investor protection; fair, orderly, and efficient markets; and capital formation in both jurisdictions

•

The joint statement outlines the key themes of the meeting and main topics of discussion

FCA - Whistleblowing Quarterly Data 2021 Q3 Update from August 2022 FCA received in total 289 new reports and 518 allegations during Q3 2021 (July – September).

Allegations Primary areas of allegations listed below in percentage order. ·

15.3% Treating customers fairly (79 allegations)

·

14.9% FSMA (77 allegations)

·

14.9% Fitness and propriety (77 allegations)

·

8.1% Culture (42 allegations)

·

6.6% Compliance (34 allegations)

·

6.4% Fraud (33 allegations)

·

4.1% Unauthorised business (21 allegations)

·

3.9% Systems and controls (20 allegations)

·

3.7% Whistle-blower detriment “SYSC 18” (19

allegations) ·

3.1% Consumer detriment (16 allegations)

View all the data here.

Calculating redress for non compliant pension transfer advice Following a periodic review of their methodology for calculating redress for consumers, the FCA has concluded that the current methodology remains appropriate and fundamental changes are not necessary. However, they are currently consulting on areas where the FCA could improve or clarify the methodology to ensure it continues to provide appropriate redress. These improvements include:

•

Consolidating the methodology as rules and guidance in the FCA Handbook;

•

Changing the approach to determining the consumer’s retirement date;

•

Payment of redress and how it is explained to consumers; and

•

How their proposals affect the proposed BSPS redress scheme.

We would be extremely interested in the views of firms on this issue and would like the to explore the possibility of a working group to discuss the proposals over the summer. Please direct your thoughts, queries, and expressions of interest in the working group to Simon Harrington.

Latest PIMFA Press Releases:

Press Coverage

Press Coverage

PIMFA welcomes extension of the

Professional Pensions: Changes to

Insurance Post: A ‘thorough review’

Consumer Duty implementation

unsuitable DB transfer redress

of approach towards retail

timeline

planned

customers needed as FCA unveils

PIMFA announces shortlist for

CityAM: Consumer Duty set to

second Diversity & Inclusion

deliver ‘biggest regulatory overhaul

FT Adviser: Industry welcomes

Awards

in a decade’ for financial services

consumer duty extension despite

PIMFA updates Future of

MoneyAge: FCA confirms final

Supervision paper and calls for

guidance on Consumer Duty rules

new Consumer Duty rules

'tight timelines' Money Marketing:

more improvements from the

Tom Selby: FCA takes a step in the

Financial Conduct Authority

right direction with Consumer Duty – now it’s time to finally address the advice gap

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EVENTS & LEARNING PIMFA D&I Awards Recognise & celebrate the fantastic

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Free event for members only 13th October 2022

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This PIMFA Breakfast Roundtable event in PIMFA have launched our D&I Awards to shine a

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This event is free for PIMFA members to attend View the 2022 Finalists

Come join us to celebrate and recognise this work!

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For more information and to register, please click here.

PIMFA WEEKLY NEWS BULLETIN | 8 AUGUST 2022 PRESS RELEASES

ABOUT PIMFA

D&I AWARDS

WEALTHTECH

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