Bulletin 18th april

PIMFA - Building personal financial futures

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18 April 2018 Dear Members

PIMFA Bulletin is a fortnightly e-newsletter delivering a snapshot of the latest news and current affairs from within the industry and PIMFA.

What is PIMFA working on?

PIMFA Board Update PIMFA recently held its Board meeting and the following people attended: Lord Deben (Chair), Liz Field, Gary Bottriell, Michael Morley, Jonathan Wragg, Paul Killik, Ruthven Gemmell, Julie Hepworth, David Loudon, David Cobb, Jimmy McCulloch, and Lawrence Wintermeyer.

Members of the Board now attend at least one of our main committees during the year and highlight key areas for Board discussion.

It was noted that the Financial Crime Committee is an engaged committee with lively and pertinent discussion on challenges and responses to financial crime that feed into policy and ideas for members. Chairs of main committees are also invited to attend the Board to highlight particular issues from their recent committee meetings. Tim West from the

Indices Committee attended the meeting and spoke about ongoing developments of the index series.

The Board also discussed the recent FOS (Financial Ombudsman Service) focused Dispatches programme, Beaufort Securities and FSCS (Financial Services Compensation Scheme), Gender Diversity within the industry and enhancing communications with members.

Defined Benefit (DB) Pension Schemes The Work and Pensions Select Committee have launched an inquiry into Defined Benefit Pension schemes following the Government’s White Paper on Defined Benefit Pensions.

PIMFA will be engaging with the inquiry and submitting a response before the deadline.

Much of the focus of the inquiry is how the regulatory regime for Defined Benefit pensions can be improved.

Should you have any thoughts or insights on this matter, please feel free to get in contact with Simon Harrington.

Brexit and contingency planning for PIMFA firms The Brexit situation one year out from EU departure remains fluid. Key recent gains include agreement on a transitional period as close to the status quo as possible which aims to allow firms to carry on business as usual without changing current practices, at least until 31 December 2020.

For firms with cross-border business into other EU member states this will be effective only if passporting to clients, access to funds, and trading on continental exchanges can continue unimpeded.

PIMFA are working with the Government to make sure that the final transitional arrangements will allow for these practices in the retail sector after 29 March 2019.

EU Withdrawal Bill The EU Withdrawal Bill transcribing EU law into UK law continues through Parliament amid many amendments and much controversy.

PIMFA met HM Treasury before Easter to discuss the practical consequences of this. We examined the MiFID (Markets in Financial Instruments Directive) language on transaction reporting and were accompanied by experts from 6 member firms and two IT houses which provide outsourced expertise to our smaller members.

The discussion showed that the effects of transposition could be severe. For example, if ‘ESMA’ (European Securities and Markets Authority) in the current EU law is translated into ‘FCA’ (Financial Conduct Authority) for UK law purposes there are many instances, such as in the need to redirect reports or change electronic macros or formats, which will require systems changes by firms. It is unlikely that this could be achieved by 30 March 2019 so would have to be allowed for in the transition schedules and not brought into effect until the end of transition. Treasury were taken aback by this impact and agreed that we should bring further cases of concern to their attention.

PIMFA is forming a working party to discuss these issues and prepare a dossier of concerns to take to the Government next month or in early June. Firms are invited to nominate a staff member to participate in this work.

Brussels update PIMFA participated in the ECMI (European Capital Markets Institute) taskforce on asset allocation in Europe in March 2018.

The meeting focused on retail investors and ESG (Environment,Social and Governance) criteria and covered, among other things, trust in financial services, demand and supply of retail investment products, financial education, and integration of sustainability factors into investment strategies, all in the context of a long term savings strategy,

PIMFA continues its engagement with European associations and regulators to foster retail investment. A brief will be made available to members in the coming weeks. In the meantime, if you have any questions please feel free to contact Ana Gallego.

PIMFA Brexit Working Group PIMFA will be setting up a Brexit Working Group on 17 May. This group will be oriented at supporting our firms in planning for the UK’s withdrawal and will initially have two main purposes: to share collective intelligence on items that may cause difficulty when transposed from EU to UK law in the Withdrawal Bill and to discuss amendments to rectify this, and to consider the longer term issues of managed divergence. Further concerns will no doubt arise and we will agree on how to deal with those at the time.

Please let Ana Gallego know if you are interested in joining.

PIMFA & General Data Protection Regulation (GDPR) In line with General Data Protection Regulation requirements, PIMFA members will be required to opt in to receive our marketing communications before 25th May if they wish to continue receiving this from us. You can do this by ticking the 'opt in GDPR box' found in your preference centre of the members area of the website (you need to be logged in to do this). You can also click the preference centre link at the bottom of any of our emails.

Please note: To ensure your details are protected PIMFA website password protection requires an eight digit password using a mix of capitalisation, numbers and punctuation. If you don’t have a profile set up with us or your log in details please contact us.

PIMFA Consultation Responses PIMFA responds on behalf of our membership to numerous key issues within our industry.

We do this via vital feedback and discussion with member firms through our committees, working parties and industry forums.

From this member feedback PIMFA create responses to consultation documents and discussion papers issued by bodies such as the UK’s regulator, the Financial Conduct Authority (FCA), Government departments and many European and International bodies.

The scope of regulation is increasing all the time and one of PIMFA’s key objectives is to ensure this regulation is proportionate and fair, bringing real benefits to the investment

management and financial advice community and their clients.

Read the latest PIMFA Consultation Papers Here

PIMFA Press Releases In order to keep you up to speed with what PIMFA is saying to the media and key stakeholders about important issues that affect our members, you can see our recent Press Releases Here.

Our latest releases include:

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PIMFA comments on The Work and Pensions Select Committee Report on

Pension Freedoms •

PIMFA Statement on the Cancellation of Preference Shares at Par

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PIMFA comments on Brexit Transition Deal

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PIMFA comment on DWP white paper on Defined Benefit Pensions

•

PIMFA calls for a review of FOS past cases and training regime

Read more here

PIMFA Blog For interesting thought-leadership and analysis on the current hot topics in our industry, PIMFA will be creating a regular blog which can found here.

The latest addition, "PIMFA's Millennial Forum returns", discusses PIMFA's current research into the Millennial generation and how best for the financial advice sector to engage with them.

This can be read by clicking here

New Members Joined

We are delighted to welcome two new member firms to the association:

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M.R. Financial Services Ltd

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Styles and Wood Ltd trading as Arctick GRC

We look forward to working with you!

What is coming up in PIMFA? PIMFA Women in Wealth Networking Breakfast Wednesday 6th June 2018 Coutts, 440 Strand, London, WC2R 0QS

Tickets: Free (Members) The PIMFA ‘Women in Wealth’ series of events gather women from across the industry for peer-to-peer networking and inspiration. This event will focus on encouraging diversity in the workplace and facilitate discussion on what we, as an industry, should be doing to support and nurture women in the sector from a business and personal perspective.

Register here

PIMFA Compliance Conference 2018 Thursday 14th June 2018

Herbert Smith Freehills, Exchange House, Primrose St, London EC2A 2EG

This year’s full day conference will bring together a high-level audience who can engage with the leading industry experts and discuss the key issues facing compliance professionals in the investment management and financial advice world.

There will be plenty of opportunity for questions, discussion and networking with other professionals and advisers in the area of Compliance.

More details including the agenda will be available shortly.

Book your place here

What's happening in our industry?

National Cyber Security Centre/National Crime Agency Cyber Threat Report The Cyber Threat to UK Business Industry 2017-2018 report, jointly authored by the National Cyber Security Centre (NCSC) and the National Crime Agency (NCA), details some of the biggest cyber attacks from the last year and notes that risks to UK businesses continue to grow.

Emerging threats are also highlighted, such as theft from cloud storage and cryptojacking, in which computers are hijacked to create crypto currencies such as bitcoin.

It acknowledges that a basic cyber security posture is no longer enough and most attacks will be defeated by organisations which prioritise cyber security and work closely with

government and law enforcement.

The full report can be found here

Capital Markets Union (CMU) We continue to monitor and input into key areas of the European Commission’s follow-up work on the Capital Markets Union, namely:

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Fintech

•

Cross-Border Distribution of Investment Funds (CBDIF)

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Sustainable Finance

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Distribution of retail investment products in the EU

On the first, the Commission has issued reports on cybersecurity and the desirability of a common framework for regulatory sandboxes.

The second concerns mainly alternative investments and UCITS (Undertakings for Collective Investment in Transferable Securities), mostly in relation to notification and marketing requirements, and will have limited resonance for PIMFA firms.

The third issue may however impact on PIMFA members since the Commission is proposing to incorporate sustainability elements into MiFID II (Markets in Financial Instruments Directive) and the IDD (Insurance Distribution Directive) and to compel institutional investors and asset managers to factor sustainability into their decision processes (proposal due in late May).

On the fourth we await the results of an EC study in the late spring and anticipate a subsequent Commission Green Paper/Action Plan on improving the market.

Consumer Protection: European Commission The European Commission launched, on 11 April, a package entitled “A New deal for Consumers” which will amend aspects of the Directives on

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Unfair Terms in Consumer Contracts

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Consumer protection in product pricing

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Unfair business-to-consumer commercial practices; and

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Consumer Rights

The aim is to ensure better enforcement and to modernise EU consumer protection rules, particularly in the light of digital developments and in respect of online business by consumers. Certain information rights will be extended to ‘free' digital services for which consumers provide personal data but do not pay with money.

One aspect is the consumer withdrawal right ie 14 days to cancel their contract. ‘Qualified entities’ will be empowered to launch representative actions on behalf of consumers and there will be stronger sanctioning powers for Member States' consumer authorities.

Consumer Protection: UK The Department for Business, Innovation and Skills (DBis) has also announced a consultation on consumer protection issues via a Green Paper entitled “Modernising Consumer Markets”, notably seeking consumer views on:

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getting consumers better deals and service in utilities markets

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helping consumers to benefit from data protection online

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improving the system of alternative dispute resolution (ADR), and

•

local and national enforcers working together to protect consumers.

The Consultation closes on 4 July, and we will consider responding.

Consumer Protection: PIMFA Members The likely impact of these EU and UK changes on PIMFA members, and what PIMFA will need to guard against or advocate, will become clearer during the consultation processes.

Irish Securities Settlement Post Brexit

In a recent edition of Bulletin, we made reference to a Euroclear paper entitled “Euroclear Ireland – Delivering continuity of Irish securities settlement post Brexit".

Euroclear have subsequently issued an update on this project which states:

“Following recent discussions with the Central Bank of Ireland and the Bank of England, Euroclear has ceased work on the development of ‘Euroclear Ireland’ as originally proposed and will now pursue alternative solutions for Irish securities settlement.”

We will advise firms as soon as we have an update from Euroclear on their alternative plans.

To read the full Euroclear update, click here

Latest Industry Events

Morningstar Investment Conference 2018 1-2 May 2018 | Royal Lancaster Hotel, London W2 2TY

Fireside Chat With Liz Field And Sarah Soar

Following on from the success of our Women in Wealth March Networking event, join us for a pre-conference networking breakfast session and hear from our CEO Liz Field in conversation with Sarah Soar, Head of Investment Management at JM Finn, as they discuss a broad range of topics that they feel passionately about, from career development to navigating the changing dynamics within wealth management and adjusting advice to meet the differing demands and expectations of a ‘new breed’ of client.

The session will be held on 2 May 08:15 - 08:45, at the newly refurbished Royal Lancaster London and is open to practising financial advisers and wealth managers only.

Please note: The full price to attend is £225 +VAT, but Morningstar are offering PIMFA adviser and wealth manager members tickets for £35 + VAT. When registering, quote the discount code: MICUK18PIMFA

To view the full agenda and line-up of speakers, please visit the Morningstar Investment Conference website or please email investmentconference@morningstar.com.

This is your last chance to register so, to ensure you don’t miss out, please click here

Women in Investment Awards Wednesday 28th November 2018 Finsbury Square, London EC2

Investment Week is delighted to launch their Women in Investment Awards 2018, in partnership with HSBC Global Asset Management. After a fantastic response to last year’s inaugural awards, with over 800 nominations received, they believe 2018’s ceremony can be even bigger and better.

A big step forward has been taken over the last year in pushing for greater diversity in the investment industry but the consensus is there is still a long way to go, especially when it comes to narrowing the gender pay gap, pushing for more flexible working arrangements, and increasing the number of women in senior positions.

Make your award nominations by clicking here

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