PIMFA Weekly News Bulletin - 11 September 2023

PIMFA WEEKLY NEWS BULLETIN

11 September 2023

The Statutory Instrument: FSMA 2000 (Exemptions from Financial Promotion General Requirement) Regulations 2023 - Regulatory Gateway

The Financial Services and Markets Act 2023 (FSMA 2023) introduces a regulatory gateway for the approval of financial promotions requiring any authorised person wishing to approve financial promotions of an unauthorised person to first obtain permission from the Financial Conduct Authority (FCA) unless an exemption applies.

The statutory instrument (SI) legislating for the exemptions has been made setting out three exemptions for where an unauthorised person communicates a financial promotion.

The statutory instrument comes into force on 27 September 2023.

To read the legislation, visit the Government’s website

FCA - Cryptoasset AML/CTF regime: Feedback on good and poor-quality applications

First published in March 2023, the Financial Conduct Authority (FCA), last week, updated its feedback on good and poor-quality applications made to them under money laundering regulations.

As of 1st September, the FCA had received 324 applications since January 2020 and 310 applications have been determined.

To help firms prepare for their application for registration, the FCA clarified that the grounds for rejecting submissions are either not incorporating key components necessary to carry out an assessment or the poor quality of key components.

To read the update in full, visit the FCA’s website

PIMFA Podcasts: All you need to know about CASS

Listen in to the latest free podcasts from PIMFA and guest expert speakers to ensure your CASS knowledge is up to date:

• CASS: Crush Your Next Audit Not Your Budget

• CASS Compliant? Prove It!

• CASS: Why Finding Breaches Is Not All Bad News

FCA Speech on Financial Crime – Sarah Pritchard

Sarah Pritchard, the Executive Director of Markets and International at the FCA, delivered a speech at the Financial Crime Summit 2023 and her key messages were:

• Fighting financial crime is about upholding standards and boosting competitiveness.

• Firms should calibrate to the right risk level and expect spot checks from the FCA.

• Reducing financial crime is one of the FCA’s “key super-charged priorities” for this year and it will be identifying firms where there may be security weaknesses

• The FCA will be stepping up its testing of firm’s risk-based systems as well as their compliance with sanctions.

• Technology has a growing significant role to play, however, firms should not outsource all responsibility to third-party providers.

• Domestic Politically Exposed Persons (PEPs) should generally be treated as a lower risk, and the FCA will act immediately if firms are found persistently acting disproportionately.

You can read the speech in full here.

FCA webpage - Sanctions systems and controls: firms’ response to increased sanctions due to Russia’s invasion of Ukraine

The FCA has published a new webpage setting out key findings from its assessments of sanctions systems and controls in financial services firms. It includes examples of good practice and areas for improvement, in order to help firms deliver even greater compliance with sanctions.

Firms are expected to:

• Consider the FCA’s findings, evaluate its approach to identifying and assessing sanctions risks, and take action where appropriate.

• Read the FCA’s Financial Crime Guide (chapter 7 in particular), SYSC 6.3 of its Handbook, its sanctions webpages and the guidance produced by the Joint Money Laundering Steering Group.

• Engage with the FCA in its testing of firms’ sanctions systems and controls, and report any significant deficiencies identified in such processes.

FCA launches review of treatment of Politically Exposed Persons

The FCA has announced a review that will scrutinise financial services firms’ arrangements of the treatment of domestic Politically Exposed Persons (PEPs), issues under consideration include:

• applying the definition[i] of PEPs to individuals and conducting risk assessments including family members and known close associates applying enhanced due diligence and ongoing monitoring in line with risk deciding to reject or close accounts for PEPs and effectively communicating with PEP customers keeping PEP controls under review to ensure they remain appropriate

• The terms of reference can be accessed here

• As announced in August the FCA are also collating experiences from MPs, peers and other interested parties. This review will report by the end of June 2024.

[i] The definition of a PEP derives from the international standards issued by the Financial Action Taskforce.

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21 September | 09:00 - 17:00

PIMFA COMPLIANCE CONFERENCE

Starting 3 October

PIMFA CASS Academy

With only TWO weeks to go before the return of PIMFA’s Compliance Conference – don’t miss out on the latest thought leadership for the industry’s compliance professionals. LAST few tickets available for PIMFA members to join the audience for…

REGULATORY UPDATES (including a session with the FCA’s Director, Consumer Investments, Lucy Castledine)

CONSUMER DUTY DISCUSSION (including a member experience panel featuring City Asset Management, Courtney Havers and Quilter)

SAFETY & SECURITY (including a session with the government’s Anti-Fraud Champion, Anthony Browne MP)

NEW TECHNOLOGIES (including discussions on Crypto Assets and Artificial Intelligence).

The PIMFA CASS Clients Academy, powered by Ruleguard, is a unique learning experience for member firms who not only want to keep up with CASS requirements, but seek to expand their knowledge and strengthen their internal capabilities to arrest rising CASS audit fees and ensure the number of incidences and breaches reported to the FCA continues to drop.

The Academy will change the way you and your firm approach CASS. You will emerge better able to tackle your firms toughest CASS audit challenges, lead with greater CASS knowledge, and inspire assurance at all levels in your firm that your next CASS audit is a success.

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