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PIMFA WEEKLY NEWS BULLETIN | 11 September 2020 Welcome to your Weekly PIMFA Bulletin Grab a coffee and take 10 minutes to read this week's highlights and key issues affecting you and your firm
WE ARE IN THIS TOGETHER Dear Nigel,
We hope you and your loved ones are safe and well during this difficult time. In addition to the latest industry news, Bulletin contains information on the impact of the virus and other key issues PIMFA are working on for our members. We remain committed to representing our members and providing as much useful information as possible during this difficult time and if there is anything we can help you with, please contact us at enquiries@pimfa.co.uk.
Best wishes The Team at PIMFA
COVID-19 & What's happening in PIMFA
New PIMFA Member Firm
We are pleased to welcome our latest new member firm to the association:
Howden Insurance Brokers – Global insurance broking, risk management and claims consulting services
We look forward to working with you.
Brexit: UK – EU Negotiations
Brexit: The UK Internal Market Bill
EU Chief Negotiator Michel Barnier put
On Thursday the EU called on the UK
out a statement following the end of the
government to withdraw some elements of
eighth round of negotiations on the EU-UK
its draft Internal Market Bill "in the shortest
future relationship which concluded in
time possible and in any case by the end
London this week. Barnier reiterated what
of the month." The EU says the Bill,
he had stated at the end of the previous
published on Wednesday, undermines
rounds of talks; there has been little to no
parts of the Withdrawal Agreement signed
progress, the UK is not engaging in good
by Prime Minister Boris Johnson and
faith and the EU is now putting increased
would be a breach of international law.
focus on preparing for a no-deal outcome.
The UK government said the proposed
Barnier underlined that "the EU remains
legislation was designed to clarify
committed to an ambitious future
elements of the Withdrawal Agreement, in
partnership with the UK” but explains that
particular the Protocol on Northern
the UK has made little effort to engage on
Ireland. The legislation would allow the UK
topics the EU considers crucial, including
to define which goods travelling from
the level playing field, credible horizontal
Great Britain to Northern Ireland are at
dispute settlement mechanisms, judicial
risk of ending up in the Republic of Ireland
and law enforcement cooperation and
and could be subject to tariffs. It would
fisheries. This comes as the EU was
also allow the UK to remove unilaterally
prepared to make concessions on the role
the need for export declarations for goods
of the ECJ as well as fisheries, two key
travelling from Northern Ireland to Great
points of contention since the beginning of
Britain. However, the Protocol on Northern
talks. Barnier concluded the statement by
Ireland stipulates that such decisions
saying that the EU is now intensifying its
would be made jointly by UK and EU
efforts to prepare for any situation come 1
representatives who sit on the Joint
January 2021.
Committee.
David Frost, the UK Chief Negotiator, said
Enraged by the UK’s draft legislative
in his statement after the 8th round of
proposal and the admission made by
talks ended that the UK has “consistently
Northern Ireland Secretary Brendon Lewis
made proposals” on level-playing rules for
that altering parts of the Withdrawal
fair competition but, despite “useful
Agreement would break international law
exchanges” with the EU, an agreement
in a ‘very specific and limited way’, the EU
has not yet been reached. He added that
called for an extraordinary meeting of the
“a number of challenging areas remain
Withdrawal Agreement Joint Committee in
and the divergences on some are still
London on Thursday.
significant" and that the UK side has been consistently clear from the start of the talks about the basis on which agreement is possible and those fundamentals have not changed. He reiterated that the UK
Brexit: The Withdrawal Agreement Joint Committee meeting
remains committed to working hard to reach an agreement by the middle of
The Withdrawal Agreement Joint
October. The talks continue in Brussels
Committee, led by UK Cabinet Minister
next week.
Michael Gove, and the European Commission Vice President Maroš
Brexit: UK – Japan trade deal
Šefčovič held an emergency session in London on Thursday. The EU rejected the UK’s argument that the draft Internal
The UK and Japan have agreed in
Market Bill would protect the Good Friday
principle the terms of their future trade
Agreement and sought further clarification
deal. The UK-Japan Comprehensive
from the UK government. Vice President
Economic Partnership Agreement is
Šefčovič said that “the Withdrawal
based on the EU–Japan trade agreement
Agreement contains a number of
but it has been tailored to suit the UK
mechanisms and legal remedies to
economy and give UK companies
address the violation of legal obligations
exporting to Japan a competitive
which the EU will not be shy in using.” He
advantage in a number of areas. UK
called on the UK government to withdraw
businesses will benefit from tariff-free
the measures that breach the provisions in
trade on 99% of exports to Japan and the
the Northern Ireland Protocol from the Bill
deal will deliver a £1.5 billion boost to the
and said in a statement after the meeting
UK economy. The agreement will also
that “neither the EU nor the UK can
improve market access for UK financial
unilaterally change, clarify, amend,
services, including greater transparency
interpret, disregard or dis-apply the
and streamlined application processes for
agreement.
UK firms seeking licences to operate in Japan. The deal creates an annual
Michael Gove, Cabinet Minister, said after
dialogue between HM Treasury, UK
the meeting that he made it perfectly clear
financial regulators and the Japanese FSA
to Šefčovič the UK “could not and would
that will explore ways to further reduce
not” withdraw the Internal Market Bill. In a
regulatory friction. The deal is also an
statement issued by the Cabinet Office,
important step towards joining the
the UK confirmed that the Bill would
Comprehensive and Progressive
continue as planned. The UK government
Agreement for Trans-Pacific Partnership
says that the measures set out in the
(CPTPP) which should give UK
United Kingdom Internal Market Bill are
businesses a gateway to the Asia-Pacific
designed to create a ‘safety net’ that
region.
ensures ministers take steps to ensure the prosperity and to protect the enormous
Homes England: Short Survey
progress the people of Northern Ireland have made in recent decades. The UK has also published a legal opinion on the
The Help to Buy team at Homes England
Bill which says that the UK Parliament
are looking for Mortgage Advisers to
would not be acting unconstitutionally in
complete a 10-minute survey so they can
passing domestic law which breaches the
understand your experience of the Help to
Brexit Withdrawal Agreement.
Buy: Equity Loan application process.
A new Help to Buy: Equity Loan scheme will be available from 1 April 2021. At the end of the survey you will have the opportunity to sign up to receive further information on the new scheme. The
PIMFA's evidence to the Work and Pensions Select Committee Call for Members Feedback
closing date for the survey is Friday 18th
PIMFA have been called to give oral
September.
evidence to the Work and Pensions Select Committee next week in support of their
Complete the survey here.
inquiry into pension freedoms.
Access webinars on demand
We would value any input from firms on what you have seen with respect to Pension Scams – particularly those arising
Acess the PIMFA learning library and the
as a direct result of COVID-19 - so that we
members only COVID-19 web area to
give a clear picture and accurately
watch or download webinars on topics
represent your views.
such as women in wealth, wellbeing, cyber-resilience, compliance, ESG,
To this end we request that members
vulnerable clients, Brexit, operational
share their thoughts and experiences with
resilience etc.
us by contacting Simon Harrington.
Click here if you have forgotten your password or to create a user account.
25% OFF ALL HARRIMAN BOOKS - FOR PIMFA MEMBERS ONLY
In partnership with Harriman House, PIMFA is delighted to offer members an exclusive 25% discount on high quality books from over 300+ titles in print, eBook and audio form.
To order, please click here.
John Glenn, Economic Secretary to the Treasury, on sustainable and responsible investing
Speaking at the Investment Association event on 8 September, John Glenn, Economic Secretary to the Treasury, said that a key part of the financial sector strategy must be to build upon the existing strengths in sustainability and responsible investment in order to tackle the challenges facing our world today. He confirmed that sustainability and responsible investment continue to be at the top of his agenda. The investment
management sector is especially important as the UK looks to deepen its relationship with international partners and strengthen its position as a leading global financial hub. Glenn said that the UK is already a world-leader in setting stewardship standards and will continue to work with industry to encourage the adoption of the Stewardship Code across the asset management sector and the broader stewardship ecosystem.
The government is also working alongside the City of London to support the Impact Investing Institute whose work on the ability of investment to create positive social impact and contribute to address social inequality is more important than ever. Glenn said that under the Green Finance Strategy, the Government set out expectations that all listed companies and large asset owners should make climate related disclosures by 2022, in line with the recommendation of the Taskforce on Climate-Related Financial Disclosures. The financial sector needs to be able to make good decisions with this new information and so, this summer, the government launched the Green Finance Education Charter to ensure financial services-related qualifications and certificates include knowledge and understanding of green finance.
New Trade and Financial Services Commissioners
European Commission Executive Vice President and Commissioner for Financial Services Valdis Dombrovskis has been an acting trade commissioner since the resignation of Phil Hogan last month and will be the EU’s new Trade Commissioner. Dombrovsksis, a former Latvian prime minister, is one of the Commission's most well-respected officials. He will remain the Commission’s representative on the Eurogroup. Dombrovskis' new role includes oversight of the EU’s trade policy and negotiations with third party countries or regions but he will not be directly involved in the Brexit talks. The main items on his agenda will be resolving the long running trade dispute with the US over aviation subsidies and getting the EU to support a single candidate for the director general position at the WTO.
Mairead McGuinness, as Irish commissioner, will take on the responsibility for financial services in the European Commission. McGuinness is an experienced four-term MEP from the European People's Party and a well-known politician in Ireland. Although she has extensive EU experience and is known for her expertise in agriculture, McGuinness does not have the direct experience of the portfolio she takes over from Dombrovskis. She said in a statement, when she was confirmed as the Commissioner Designate, that the financial
services portfolio "cuts across all policy areas," and "is fundamental to European citizens, businesses, SMEs, and how the EU recovers from the COVID-19 pandemic."
UK – Swiss Financial Dialogue
HM Treasury and the Swiss State Secretariat for International Finance (SIF) held their 4th Financial Dialogue in Bern on 8 September. The Financial Dialogue was chaired by Swiss Deputy State Secretary Stefan Flückiger and Katharine Braddick, Director General (Financial Services) of HM Treasury. The discussion focused on the Financial Dialogue’s agenda and the implementation of the Joint Statement on deepening cooperation between Switzerland and the UK. The exchange of views highlighted several opportunities for intensified cooperation including the impact of the COVID-19 pandemic on the respective economies and financial markets; the respective approaches to sustainable finance and how to increase collaboration on the potential domestic implementation of the recommendations issued by the Task Force on Climate-related Financial Disclosures.
On stock market equivalence, the UK reconfirmed that as soon as it is feasible, once the equivalence powers come into force, the necessary legislation will be in place to allow UK firms to meet the UK’s share trading obligation on Swiss exchanges. Swiss officials confirmed that once Swiss shares can be traded freely on Swiss exchanges by UK market participants, UK exchanges will again be able to trade Swiss shares. Both sides exchanged views on their respective priorities for several multilateral fora, such as the FSB and IOSCO, and discussed the shared ambition to see more women in senior roles in the financial services sector. The next Financial Dialogue is expected to take place in London in 2021.
LATEST PIMFA BLOGS & PRESS RELEASES
•
PIMFA welcomes Work and Pensions Select Committee investigation into pension scams and wider inquiry into pension freedoms
•
PIMFA welcomes Government consultation into greater regulatory oversight of financial promotions
•
PIMFA supports TheCityUK report on recapitalising businesses post-Covid19
•
PIMFA welcomes appointment of Nikhil Rathi as Chief Executive of the Financial Conduct Authority
•
PIMFA welcomes proposed permanent FCA marketing ban for mini-bonds
•
Blog: ESG and Covid 19
EVENTS & LEARNING
PIMFA Training CASS CLIENT MONEY: What you should know in 2020. 30 September
Identify weaknesses in your firms' client asset systems to prevent causing serious financial detriment to customers and counterparties. The aim of this online course is to support you to: •
Stay up to date and compliant with current CASS rules
•
Recognise the FCA’s concerns regarding Client Assets
•
Clarify your firm’s responsibilities when handling client money and safe custody assets
•
Design effective controls and governance to reduce the possibility of regulatory and reputational damage
•
Create and maintain robust oversight arrangements of client assets
•
And more...
For more info and to book your place, please click here. PIMFA Training GETTING THE DB PENSIONS TRANSFER ADVICE PROCESS RIGHT 13 October In this online session we will help you: •
Understand what’s going wrong with DB pension advice, and how you can get it right
•
Grasp the FCA’s expectations as to how to act and treat customers
•
Identify weaknesses and poor practices in your existing advice process
•
Learn how to test whether your DB pension transfer advice is likely to stand up to FCA scrutiny
•
Receive tips on how to ensure you capture the right “know your customer” information from clients
•
Recognise how you can improve (and shorten!) your suitability reports
For more info and to book your place, please click here.
PIMFA Training IS YOUR APPROACH TO VULNERABILITY FIT FOR PURPOSE? 5 November
This practical live online learning session underpinned by PIMFA member guidance on vulnerability and delivered by an experienced senior practioner will help your firm review your current approach to vulnerability in light of COVID-19 and recent regulatory announcements. By attending this live online learning session, you will learn how to: • Interpret what the FCA latest guidance on vulnerability means for your firm. • Grasp the full extent of your regulatory obligations on vulnerability in light of COVID-19 • Adopt the strategies and approaches leading firms take to developing and embedding a vulnerable-centric approach. • Embed a culture that consistently supports vulnerable clients better than you do today And more... For more info and to book your place, please click here.
PIMFA Training SM&CR CONDUCT RULES TRAIN THE TRAINER PROGRAMME 19 November As the regulator expects firms to have role-specific training in place that provides a high degree of confidence that conduct rule breaches will be identified, a new and different approach to Conduct Rules training is required. But creating your own SM&CR Conduct Rules training in line with the FCA expectations stipulated in COCON 2.3 FCA Handbook takes time. Firms will need to plan, research, design, write, create and deliver practical sessions, with an emphasis on job rolespecific training by 31st March 2021! That’s why PIMFA has partnered with City HR to create a cost effective, ‘Train the Trainer’ workshop and toolkit that takes all the hard work away from you – allowing you to focus on delivery only. For more info and to book your place, please click here. PIMFA Event VIRTUAL ASSOCIATE MEMBERS UPDATE
We will explore topics such as regulation, operations, Brexit, financial crime, ESG and others and provide an opportunity to discuss with PIMFA staff specific issues important to the membership.
This event also showcases our ongoing events and publications programme providing examples of how Associates can engage with Members and maximise the value they receive from their membership.
This event is FREE for PIMFA Associate Members. For more info and to book your place, please click here. PIMFA Webinar WEBINAR WEDNESDAY: What is Open Finance and how could it work in practice? 16 September This week’s webinar is open to all and will see PIMFA senior policy adviser Des FitzGerald joined by Anastasia Georgiou, Director of Client Solutions, Advisor Segment, (EMEA) at Morningstar to discuss Environmental, Social and Governance (ESG) Investing. What will be discussed: ESG is now an essential part of long-term investing. Demand for ESG investments has never been higher with £1.2 billion of inflows into ESG funds between April and July this year in the UK alone. •
What ESG investing is and the opportunities it
•
How to interpret ESG data
•
How to speak to their clients about their ESG investing requirements
•
How the ESG Academy will help advisers.
Registration will open on Monday 14 September. PIMFA Partner Event Reuters Webinar: Building Great Portfolios for 2021 with Citi Private Bank’s CIO 16 September As we enter Q4, investors are increasingly focusing on how to build great portfolios for 2021. Reuters U.S. Financial Markets editor Megan Davies will interview David Bailin, Chief Investment Officer at Citi Private Bank for an exclusive webinar. The event is free to PIMFA members and will be live at 5pm. David’s insights will include: •
Emerging Markets: Identify great opportunities in emerging markets, incl. LATAM
•
Value Investing: How a new type of value investing can unlock greater profitability
•
Recovery: Balancing Coviddefensives and bargain Covidcyclicals to achieve alpha in a recovering market.
For more info and to book your place, please click here.
The PIMFA ESG Academy, which starts on 15th September 2020, is a self-paced online programme that is definitely NOT your traditional online class! As you learn at your own pace and in your own time, you will have access to an evergreen library of ESG content that you can engage and interact with on your tablet, computer and mobile – all free for PIMFA members! The PIMFA ESG Academy, supported by Morningstar, is our response to the growing demands by advisers for an immersive, engaging, CPD-approved learning experience that supports them in making the most of the growing ESG opportunity by having more effective ESG conversations with their clients.
Please click here to find out more.
PIMFA are delighted to be partnering with WLTH 2020. The event takes place entirely online on 15-16 September.
As a PIMFA member, we are delighted to be able to offer you a FREE ticket to the event. You can book your place here.
PIMFA IN THE PRESS
FT Adviser: Pensions in govt sights for Covid payback FT Adviser: Why the FCA's guidance on vulnerable clients doesn't help advisers FT Adviser: Tributes pour in for ‘engaging’ and ‘fun’ Jack McVitie City AM: Share and share alike: electronically? Professional Adviser: Anthony Rafferty; Keeping your clients' information secure FT Adviser: FCA wants evidence of 'informed decisions' in DB advice
LATEST PIMFA CONSULTATION RESPONSES
PIMFA’s latest consultation response is to HM Treasury regarding their consultation on expanding the Dormant Assets scheme
Read this and all of our other PIMFA consultation papers here.
WHAT'S HAPPENING IN OUR INDUSTRY
FCA Annual Report 2019-20
Unsurprisingly, in its end of year report, the FCA confirms the main challenge it faced, and continues to deal with, is COVID-19.
The FCA is continuing preparations for Brexit and SM&CR and is monitoring the risk of scams as well as impacts of high-cost credit and large transaction volumes relating to investments and pensions.
The proper functioning of the credit market is crucial and the FCA is confident its nimble response to COVID-19 reflects historical investment in new systems and changed processes and conducting more effective data analysis. The focus on operational resilience highlights the continuing importance the FCA places on firms being able to mitigate operation risk and plan for unexpected events (like COVID-19) and not to underestimate the impact on operations from such risks.
In terms of Green Finance, the FCA has ongoing engagement with the Treasury in the context of the UK Government’s commitment in its Green Finance Strategy to match the ambition of the objectives of the EU Sustainable Finance Action Plan, and more engagement with the sector is expected on this issue.
The FCA's Annual Report and Accounts 2019/20 can be accessed here.
FCA Covid-19 Impact Survey
The FCA issued the first phase of the COVID-19 impact survey in June covering around 13,000 firms across 15 Supervision portfolios (Tranche 1), and then rolled this out to a further 9,500 firms in 21 portfolios (Tranche 2) at the beginning of August. The survey has helped them obtain an accurate view of the impact of COVID-19 and supported their work to mitigate risks of harm to consumers, the market and competition within it. As advised previously, they will now be repeating this survey for Tranche 1 to understand the change in firms’ financial positions with time.
We are planning to send this survey to the relevant firms in Tranche 1, some of which may be members of your associations, on one of the following dates:
Batch 1: to be sent on 16 Sept - response due by 30 Sept Batch 2: to be sent on 17 Sept - response due by 1 Oct Batch 3: to be sent on 18 Sept - response due by 2 Oct Batch 4: to be sent on 22 Sept - response due by 6 Oct Completion of the survey is mandatory under section 165 of the Financial Services & Markets Act (FSMA) 2000. The FCA may exercise their powers under FSMA for firms who do not respond. They have designed this survey so that it is quick and simple to complete. However, if due to exceptional circumstances a firm cannot access its financial
information, they will need to ensure that they complete the questions where the relevant information is available.
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