PIMFA Fortnightly News Bulletin - 15th January 2020

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PIMFA Fortnightly News Bulletin - 15th January 2020 Welcome to the PIMFA Bulletin, our fortnightly e-newsletter delivering a snapshot of the latest news and current affairs from within PIMFA and the industry.

What is PIMFA working on?

New PIMFA Member Firm We are pleased to welcome our latest new member firm to the association: Sand Aire – Family office

We look forward to working with you.

BREXIT Update Last week the EU (Withdrawal Agreement) Bill passed the House of Commons and began its Lords stages on 13 January. This Bill aims to implement the agreement between the UK and the EU under Article 50(2) of the Treaty on EU, which sets out the arrangements for the UK’s withdrawal from the EU.

Timeline The House of Lords debated the key areas of the Bill in second reading on 13 January.

The Committee stage, a detailed line by line examination, is scheduled to take place on

14, 15 and 16 January. Report stage, a further chance to examine the Bill and make changes, is scheduled to take place on 20 and 21 January. Third reading, a chance to 'tidy up' the Bill and make changes, is scheduled to take place after the conclusion of the report stage. Following completion of the third reading, the bill may pass to the Commons for consideration of any Lords amendments. The EU (Withdrawal Agreement) Bill is expected to complete progress through UK Parliament on 27 January 2020.

UK-EU Relationship Last week European Commission President Ursula von der Leyen met with Boris Johnson to discuss the future UK – EU relationship. With the Prime Minister ruling out any extension to the transition period, both von der Layen and EU Chief Negotiator Michel Barnier, speaking at a separate event in Sweden, warned that 11 months between the UK’s exit and the end of the transition period on 31 December 2020 is not sufficient to conclude negotiations and said that the EU will 'prioritise' accordingly.

Michel Barnier again underlined the EU’s intention to defend the integrity of the Single Market, setting out his priorities for the talks until the end of 2020: •

Cooperation on critical issues including climate change and a joint approach to the

Middle East •

Internal and external security to tackle terrorism and cyber crime

•

An economic partnership based on a level playing field on environmental and social

standards, state aid and tax matters

The European Commission will propose, in the next few weeks, a comprehensive draft mandate for negotiations to the European Council, to the Council of Ministers and to the European Parliament. The Council will be holding near-daily ‘seminars’ which will bring together EU27 representatives to establish the issues to be prioritised during the talks and set out the different sectoral mandates for each agreement.

The PIMFA Brexit Working Group PIMFA has regularly distributed advice on how firms should consider managing the change to 3rd country operations in respect of retail client business in the EU. We will be happy to do so again if that is needed. However, while the situation until 31st December 2020 looks certain and clarified, it remains unclear what will happen beyond that and whether any kind of deal will emerge that is satisfactory, either from the broad perspective

of financial services as a whole, or specifically from the viewpoint of private client investment management and advice.

In order to influence this fluid situation to the best advantage of our member firms, PIMFA will this year begin to prepare views on our interests in the final agreement and how we want these expressed. If successful, this could lead to the inclusion of proposals making it easier for our members to undertake 3rd country EU business than is currently the case. We will be preparing papers setting out our thoughts and recommendations, and will want to build consensus with the membership on these. In order to achieve this outcome, we propose reconvening the Brexit working group early this year. Later on, we should begin to receive more indications from government about what is being considered and where industry inputs will be welcome. This will help us to target our recommendations more accurately. We will distribute further details shortly but any questions in the interim should be directed towards John Barrass or Maja Erceg or call 020 7448 7100 and ask for one of them.

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New HM Treasury Money Laundering Regulations

HM Treasury confirmed that their new Money Laundering Regulations are in force from 10 January. The full Instrument can be read here, and a summary of the rules by HM Treasury can be found here.

FCA has acknowledged the changes in their webpages below which also contain a link to the amendment Statutory Instrument (SI). Their general update page can be read here, and their Crypto pages can be viewed below: Cryptoassets: AML / CTF regime Cryptoasset activity registration

For further information, please contact Giulia Lupato.

PIMFA/Department for International Trade (DIT) Round Table PIMFA is holding a round table discussion at our offices on 27th January 2020 from 3pm – 4 pm with the Department for International Trade on post Brexit expansion opportunities for UK financial services firms.

The biggest areas of economic policy that the UK government will need to focus on post Brexit include international trade and investment. The Department for International Trade leads the Government’s efforts in assisting companies to take advantage of new business opportunities and branch out to new locations. It helps UK based companies to trade internationally by providing tailored support as well as removing barriers to trade.

As part of the round table with PIMFA, the DIT will give a short presentation on its role in the wider government context and the types of services offered to UK companies. The presentation will be followed by an open discussion with PIMFA members around areas where the DIT could provide support for their international expansion plans.

If you would like to attend a PIMFA/DIT round table, please confirm your attendance by email to Maja Erceg.

Senior Managers & Certification Regime (SM&CR)

From 9 December 2019, the Senior Managers and Certification Regime (SM&CR) has been extended to cover all solo-regulated FSMA authorised firms to include investment advisers, investment managers, private equity firms and consumer credit firms.

The purpose of SM&CR is not so much enforcement but to encourage firms and their staff to take more responsibility for decision-making in their areas, which in turn should lead to simplifying organisational complexity within firms and improving culture.

If firms have any feedback or queries relating to the preparation and application of new SM&CR requirements please do let us know by contacting Des FitzGerald.

Sustainable Finance and Environmental, Social & Governance (ESG) In May 2018 the European Commission published its Sustainable Finance Action Plan comprised of three legislative proposals which seek to facilitate the redirection of capital towards sustainable investments on: Sustainability Disclosures, Low-carbon Benchmarks and a Taxonomy.

Agreement to proceed with these issues has been reached at EU level, and the authority to implement them is currently being passed to the relevant supervisory authorities with technical guideline updates for disclosures and benchmarks expected during 2020. It remains the case that under MiFID II changes, it will be a requirement for firms to factor a client’s ESG preferences into the advice process, and ESMA has already confirmed it considers doing so to be good practice with more guidance expected from ESMA in the coming months.

PIMFA has a Sustainable Finance Working Group engaging in an overview of this issue but will also be setting up a working party linked to membership of our Regulatory Committee that will aim to focus on certain specific regulatory obligations as and when further information on those becomes available. If you would like to join either group please contact Des FitzGerald.

PIMFA Guide to Appropriateness

As part of a series of guides to provide support for members, PIMFA has published a Guide on Appropriateness. The purpose of this guide is to provide help on the application of the appropriateness rules to our member firms’ business models. The guide considers MiFID II, the IDD, ESMA and EIOPA’s guidance and additional supervisory output from the FCA. PIMFA’s Guide to Appropriateness is meant to be a dynamic document and will be amended and updated at regular intervals. We very much welcome your feedback and comments. Please email any comments to enquiries@pimfa.co.uk marked ‘Appropriateness Guide’ in the email title.

You can read the Guide to Appropriateness here.

European Securities and Markets Authority (ESMA) Strategic Orientation 2020 -2022 ESMA has published it's Strategic Orientation for the 2020 – 2022 period. The document sets out ESMA’s future focus and objectives as well as its expanded responsibilities and powers following the European Supervisory Authorities (ESAs) Review and the European Market Infrastructure Regulation (EMIR) 2.2. Overall, the priorities show a move towards supervision and enforcement rather than establishment of more rules.

The directions ESMA will be taking are: •

Focus on retail investors to further enhance the European capital markets;

•

Strengthen sustainable finance;

•

Make smart use of digitalisation and technology in financial markets;

•

Globalise European regulatory standards for financial markets; and

•

Further utilise proportionality in supervision and standards to allow for SME

innovation.

Proposed actions to achieve greater focus on risks to retail investors include: •

ESMA will coordinate National Competent Authorities (NCAs) financial education and

literacy initiatives.

•

ESMA will set up retail analytics to identify risks and continue research.

•

New co-ordination role on mystery shopping will provide new insights on misconduct

across the Union.

•

Retail investors can benefit from fintech. In co-operation with the EBA, EIOPA and

NCAs, ESMA will develop a common approach to fintech, mainly focusing on the impacts it has on investor protection.

Please contact Maja Erceg for more information.

Latest PIMFA Press Releases 

PIMFA reacts to General Election result: Let's Work Together to Build a Culture of Saving and Investment



PIMFA Under 40 Forum: Consistent theme is the Need for Financial Education in the UK



New MSCI PIMFA Equity Risk Index Series Launched



PIMFA Responds to Financial Transaction Tax



PIMFA Launches Mental and Financial Wellbeing Campaign

Read all of PIMFA's Press Releases

Latest PIMFA Consultation Responses 

PIMFA response to ESAs’ Joint Consultation Paper: Amendments to the PRIIPs KID



PIMFA Consultation Response on ESMA's Market Abuse Regulation Review



PIMFA’s response to Law Commission Intermediated Securities - Call for Evidence



PIMFA response to Pension transfer advice: contingent charging and other proposed changes



PIMFA’s response to Guidance Consultation 19/3: Guidance for firms on the fair treatment of vulnerable customers

Read all of PIMFA's Consultation Papers

What's coming up in PIMFA? 2020 Events and Learning Call for Speakers Do you or someone you know have an amazing story to share, a great innovation to showcase or do you just love being on stage? Complete our Call for Speakers Submission form and let us know about it so we can get you involved in 2020!

Please click here to complete your submission

PIMFA Learning We continue 2020’s Learning and Events programme on Tuesday, 3rd March with SM&CR – Your next step.

Firms will now have 12 months to assess Certified staff as fit and proper and issue certificates, as well as train other Conduct Rules staff. To help you understand what the FCA expects under the Certification Regime and how it affects your approach to Training & Competency (T&C), on Tuesday 3rd March 2020 we are running a one day interactive training workshop on What does good training and competence look like in your firm under SM&CR and MifiD II, through which we will help you demonstrate to the regulator that you have effective processes in place for the measurement and management of individual competence and capability.

For more information and to reserve your place on this training workshop, please click here.

Financial Adviser Forum 22 January 2020, 13:30 – 20:00

Farrer & Co, 20-23 Lincoln’s Inn Fields, London WC2A 3ED Our Forum, free to members, begins at Farrer & Co with an afternoon of education and CPD, ending the day with a drinks reception at the House of Commons. Topics on the day will include: 

Retirement – How do Financial Planning Build a Client Friendly Proposition for the Future?



Managing Risks in Challenging Economic Environments



Client Communications – How to Drive Better Understanding



The How to Guide to Acquisitions

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Later Life Advice – Preparing for Care, IHT, Intergenerational Wealth Transfer

The educational forum will be followed by a drinks reception at the House of Commons.

Sign Up

Financial Crime Conference 4 February 2020, 08:30 – 17:00 Herbert Smith Freehills, London Join us at the PIMFA Financial Crime Conference 2020 and access leading industry debate from professionals across the regulatory, law enforcement and cyber security space.

As the financial crime landscape evolves with new techniques and technologies, the growing threat to firms and their clients is undeniable.

Confirmed speakers include: • Commissioner Ian Dyson – City of London Police • Alison Barker, Director of Specialist Supervision – FCA • Catherine Kernaghan, Head of Counter-Illicit Finance & Economic Crime Reform, HM Treasury • Damon Batten, Managing Consultant – Bovill • Susannah Cogman, Financial Crime Expert and Partner – Herbert Smith Freehills Sign Up

Wealth of Diversity Conference & Women in Wealth Drinks 17 March 2020, 08.30 - 19.00 Fidelity International, 4 Cannon St London, EC4M 5TA Today we face many challenges in recruiting and engaging with our workforce and, with a diverse client base and shifting wealth patterns, the need for diversity and inclusion in our workforce is ever increasing to meet the needs of clients, both existing and potential.

Join us to discuss topics including: •

Culture and Inclusion • •

•

Metrics

Unconscious Bias Why Diversity Matters

Early Bird tickets available for a limited time, click on the box below to book your place.

Sign Up

What's happening in our industry Latest news from the Financial Conduct Authority FCA returns funds to land banking victims

The FCA has obtained High Court approval for a scheme to return £2.5 million to compensate victims of a series of unauthorised collective investment schemes.

Between 2005 and 2010, around 800 people invested approximately £32.8 million in unauthorised collective investment schemes established and operated by Countrywide Land Holdings Limited, James Kenneth Maynard (trading as Regional Land and Countrywide Land Holdings) and Stephen Ronald Watkins (trading as Consolidated Land UK). These schemes involved the unlawful selling of plots of land. You can read the full FCA press release here.

FCA and Bank of England announce proposals for data reforms across the UK financial sector

The Financial Conduct Authority (FCA) and the Bank of England (Bank) today outlined their plans to develop their data and analytics capabilities. Both authorities depend on access to high-quality data to fulfil their respective missions of maintaining monetary and financial stability, market integrity, effective competition and consumer protection. Read the full FCA press release here.

Latest Industry Events Royal London – Women’s Network Event 28 January 2020, 16:30 – 18:00 Royal London Office, St Andrew House, 1 Thistle Street, Edinburgh, EH2 1DG This event, run by Royal London in association with PIMFA, will be discussing topics such as work life balance, the challenges women face working within financial services and how they've overcome these. There will be a chance for you to pose some of your own questions as well.

Sign Up

Apprenticeship Levy Breakfast Briefing 13 February 2020, 8:30am – 10:00am 3rd Floor, PIMFA offices, 22 City Road, London, EC1Y 2AJ The briefing will be given by Financial Services Training Partners (FSTP), an accredited apprenticeship provider.

Whether or not your firm is an Apprenticeship Levy payer, 2020 is the time to start thinking about how the use of Apprenticeships can support your business strategy and growth ambitions.

Most firms will, from time to time, struggle with succession planning, inclusion and

retention issues. Equally, using Apprenticeships just because you feel you have to is not a solution. It can feel very resource-heavy to select the right standards, source the right provider and manage the requirements of the apprentices as they move through their programmes. All of these issues, as well as a clear walk through the Apprenticeship Levy and use of Apprenticeship in Financial Services and the options available to you, will be covered in our breakfast meeting.

We hope you or a relevant colleague may wish to attend.

Please can you confirm your attendance to Alice Carson, including any dietary requirements. Alternatively, please click below.

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Diversity and Inclusion Workshop by Braxton Group 27 February 2020, 14:00 – 17:00 MBAR, Unit 2-3, 60 Threadneedle St, London, EC2 R8HP

At this workshop, you will learn how to nurture a culture to attract and retain the best staff and customers. You will also contribute to building sound business principles that develop Diversity and Inclusion in the workplace.

Sign Up

The Money Marketing Awards 2020 June 2020 London The premier financial services awards that recognise, reward and bring together the industry's leading advisers and providers for an unforgettable night of networking and

celebration.

Recognise and celebrate your success of 2019. Entry is free, all you have to do is complete our online entry form. Make sure you view the relevant categories and further details on the entry process.

Closing date for entries is Friday 17 January 2020.

Sign Up

View all the latest industry events on our website here If your firm has an event which you would like to post on this area, please click here to submit it.

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