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PIMFA WEEKLY NEWS BULLETIN | 19 July 2021 Dear Nigel,
Welcome to the PIMFA Bulletin; grab a coffee and take 10 minutes to read the latest industry news impacting you and your firm.
The FCA Business Plan 2021/22
The FCA has launched its Business Plan to address post-Pandemic realities and made a commitment to be a more, innovative, adaptive and assertive regulator. The commitment reflects the FCA’s Business Plan for 2021/22, the first annual plan since Nikhil Rathi joined the FCA as Chief Executive in October 2020. Better outcomes for consumers and ensuring market integrity will be the key cornerstones in the FCA’s new approach.
The FCA is setting the bar high to support market integrity and sustainable innovation ensuring firms start with high standards and maintain them and using new approaches to find issues and harm faster. The many commitments in the plan include investing £120m in the data strategy over the next 3 years, tackling misconduct to maintain trust and integrity, being proactive at the boundaries of the perimeter and progressing proposals for a new Consumer Duty to raise standards in firms’ treatment of consumers.
The FCA also announced that it will begin a review of aspects of the rules on the scope and coverage of Financial Service Compensation Scheme (FSCS) payouts for specific
regulated activities. PIMFA has welcomed the FCA's announcement that it intends to identify and prevent harm arising in the market faster and more effectively. We have regularly raised concerns about the FCA’s standard of supervision in the past which, we consider, has contributed to firms failing, consumer detriment and ever rising and unsustainable FSCS bills for the vast majority of well-run firms in the market. We set out a number of recommendations in our recent paper on FSCS levy reform and it is encouraging that these have been largely adopted in the FCA’s plans to improve its processes and oversight of firms published today.
However, we are clear that this cannot simply involve the provision of new rules and a further expansion of the Handbook. The FCA needs to use the tools already available to them better. To this end, we look forward to the fruits of its data strategy work being implemented to ensure firms are providing data with a purpose rather than just because it is an obligation.
PIMFA will continue to work closely with the Regulator to ensure that we can all work towards a retail investment market which consumers derive confidence from, and our member firms can thrive in.
Digital payments ripe for closer cooperation between UK and US
Greater regulatory and supervisory innovation and cooperation between the UK and the US would boost the scale and technological sophistication of their respective financial services sectors and help drive global regulatory alignment, according to a new paper from TheCityUK and Eversheds Sutherland. It makes clear that this alignment would have the potential to significantly reduce cross-border barriers to entry for financial services providers and allow businesses and consumers to make efficient and data-rich crossborder payments. The paper, ‘UK-US financial innovation: digital payments,’ the first in a series of six focused on financial innovation between the two markets, argues that although challenges prevail, removing regulatory obstacles to establish a deep and successful digital payments market
would be one key area of focus and offer substantial mutual benefits to both markets. Clear and manageable rules regarding privacy, data use, and transfers of consumer data between the UK and US will be critical to driving innovation and collaboration between the US and UK in financial services, including in digital payments.
As countries continue to accelerate the use of cashless payments, regulators and industry in the US and UK should work together to ensure that future innovation in payments addresses the needs of the underbanked segments of our communities. This can be achieved through existing business and government forums such as the British American Finance Alliance.
MSCI PIMFA Index Series’ – New asset allocations effective from 01.09.2021
The PIMFA Indices Committee has made changes to the portfolio weights of the MSCI PIMFA Index Series’. Changes below will be effective from Wednesday 1st September. MSCI PIMFA Private Investor Index Series
MSCI PIMFA Equity Risk Index Series
For further details please contact us at indices@pimfa.co.uk.
Latest PIMFA Press Releases
PIMFA welcomes FCA business plan proposals to prevent harm arising in the market faster and more effectively FCA must come forward with tangible, tested proposals to strengthen the financial promotions rules PIMFA welcomes reduction in proposed FCA fees
Latest PIMFA Press Coverage
International Adviser: UK regulator to review FSCS compensation payouts
Professional Adviser: FCA to review scope and coverage of FSCS compensation
Investment Week: FCA targets ratings and data providers in ESG focus; proposes TCFD
disclosures from 2022 PIMFA calls for FCA proposals to give stronger nudge to pension savers towards advice
Money Marketing: Social media great place for financial education
EU Regulation – Sustainable Finance
On 12 July 2021 the Platform on Sustainable Finance published two draft reports. The reports are important steps in the Platform’s main deliverables to advise the European Commission on potential social and extended environmental taxonomy. The Platform’s advice on this will feed in to the Commission’s report on the potential extension of the taxonomy framework to be adopted by the end of 2021. The draft reports will argue that, in the face of a pandemic, unanswered social questions around a sustainable transition, continuing human rights abuses and continuously rising costs for housing, the time is right to identify economic activities that contribute to advancing social objectives. Just as the EU environmental taxonomy defines activities that substantially contribute to environmental objectives, a social taxonomy would do the same for social objectives.
The second draft proposal focuses on support for the environmental transition needed in the whole economy – it proposes further clarity on both activities that are significantly harmful to environmental sustainability and those that have no significant impact on it. The aim is to support transitions in areas currently of "significant harm". They should transition to a level that at least does not cause significant harm, even if they do not actually reach substantial ‘green’ contribution. The report will set out options to build on the existing taxonomy and its use.
EVENTS & LEARNING
Diversity & Inclusion Awards Entries Close: 17 August | Event Date: 20 October 8 Categories 15 Judges 4 weeks remaining to submit your entry FREE to Enter 'There is substantial research to show that diversity brings many advantages to an organisation: increased profitability and creativity, stronger governance and better problem-solving abilities. Employees with diverse backgrounds bring to bear their own perspectives, ideas and experiences, helping to create organizations that are resilient and effective, and which outperform organisations that do not invest in diversity.' [World Economic Forum] Both the social and business case for diversity & inclusion (D&I) is clear, and PIMFA believe it is important to demonstrate the fantastic work being carried out across the sector to develop a diverse and inclusive industry. We are encouraging all organisations - large or small - at whatever point they are on with their D&I Journey to enter. Whether you are just starting out and looking for inspiration and ideas or are further along and can share experiences and insight, we want to hear from you about the work you are doing - all 8 of the categories are available to enter here.
Find out more and start your entry
View upcoming PIMFA Events and Learning here.
PARTNER EVENTS
WEBINAR How to Die Well - A practical guide to death, dying and loss 29 July 2021 | 18:30 - 19:30 In partnership with Royal London, photographer and filmmaker Rankin and host Andrea Fox will be joined by Guardian columnist and bestselling author Rhik Samadder, palliative care expert Dr Kathryn Mannix, and financial expert and broadcaster Sarah Pennells.
Since the outbreak of the COVID-19 pandemic, the subject of death has become more prominent in our daily lives than ever before – and yet we still find it incredibly hard to talk about. This is understandable, but important to overcome if we want to better prepare ourselves and our loved ones. This livestream event will blend personal stories with emotional, practical, & financial guidance to show that dying well can be a fundamental part of living well. Find out more and register here.
The FCA Annual Report
The FCA has published its Annual Report and Accounts showing how its work over the last year has met the FCA’s objectives and delivered the key priorities in the Business Plan 2019/20. Charles Randell, the FCA’s Chair, points out in the report foreword that the economic impact of coronavirus will be significant, affecting borrowers, savers, financial firms and other businesses large and small. The FCA will be expected to ensure the fair treatment of struggling consumers and small businesses while ensuring that markets work well for the recovery.
Randell added that, in order to meet these challenges, the FCA will continue to transform, developing regulation that is fit for the future and the systems and capabilities that will be required. This transformation will equip the regulator to supervise 60,000 authorised firms and, while it will never prevent all firm failures, the ambition is to be faster in identifying harm and to intervene more quickly.
PIMFA's Consultation Responses
PIMFA’s latest Consultation Response is to the FCA's CP21/9 on the changes to UK MiFID’s conduct and organisational requirements. Read this and all other PIMFA consultation papers here.
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