Featured: PIMFA responds to FCA's GC 24-4 and latest asset allocation survey now open
21 October 2024
PIMFA Responds to the Financial Conduct Authority's (FCA's) GC 24-4
Proposed Amendments to FG17/6 - Guidance on the Treatment of Politically Exposed Persons
PIMFA have submitted a response to the FCA's consultation on proposed amendments to FG17/6 - Guidance on the treatment of Politically Exposed Persons (PEPs).
Noting that member firms already employ a proportionate and risk-based approach to PEPs, the response sets out potential areas of concern such as mitigating financial crime risks while ensuring fair access to services and the need for further clarification from the regulator on the practical application of the guidance.
Access the response here.
The 2024 Q4 PIMFA Asset Allocation
Survey IS OPEN
Complete this quarter's survey(s), and firms can:
• Receive a complimentary ‘Compare My Allocations Report’ which shows how the strategic asset allocations of your firm’s model portfolios compare to the participating peer average.
• Assist in ensuring that the index weight methodologies for the MSCI PIMFA Private Investor and Equity Risk Index Series’ remain relevant benchmarks for the UK wealth management sector.
Registered firms can simply click here to login and submit your firms quarterly strategic asset allocations using our new and improved dashboard.
We value and encourage participation from our full member firms, if you would like more information or to sign-up you can contact us at indices@pimfa.co.uk.
PIMFA Operational Resilience survey on Important Business Services (IBS) and Impact Tolerances (ItoLs) - Extended Deadline to 31 October
The PIMFA Operational Resilience Working Group is conducting an anonymous survey, which covers six areas: IBS, ItoL, Scenario Testing, Mapping, Tooling and Priority Areas for March 2025. The aim is to gain a better understanding of operational resilience across the sector, and in scope firms' preparedness for the 31 March 2025 deadline.
Many thanks to those firms who have completed the survey already. We have received a good number of responses, but we would like some more, to further develop the picture across the sector - so we have extended the survey deadline to 31 October.
If you would like to participate in the survey, or are interested in joining the Operational Resilience Working Group, please contact Kevin Sloane.
PIMFA Regulatory Forum
The next Regulatory Forum will take place online on Wednesday, 23 October from 3pm to 4pm.
The agenda will include updates on:
• FCA Dear CEO letter for financial advisers and investment intermediaries - Simon Harrington, Head of Public Affairs
• Forbearance measures for investment company cost disclosure - Simon Harrington
• FCA Regulatory Initiatives Grid – David Ostojitsch, Director of Government Relations and Policy
• October 30 Budget - Simon Harrington
• Employment Rights Bill - Maja Erceg, Senior Policy Adviser, EU and Government Affairs
• Advisors Sustainability Group (ASG) update – Maja Erceg
• PIMFA upcoming publications and events – David Ostojitsch
The PIMFA Forums are open to representatives from all PIMFA Members and Associate firms.
If you or your colleagues would like to attend the Regulatory Forum and are not currently on our distribution list, please email Heidi Bryant.
Department for Business and Trade: Information Sharing by Regulated Firms
The Department for Business and Trade has published guidance on the information sharing measures in the Economic Crime and Corporate Transparency Act 2023 (ECCTA).
The Guidance aims to support firms in using the voluntary information sharing provisions of direct sharing of information with another firm in the regulated sector (section 188), and indirect sharing of information via a third-party intermediary (section 189).
The Guidance (paragraph 47) notes:
• When relying on the information-sharing provisions, firms need to be mindful of obligations to report knowledge or suspicion of money laundering and/or terrorist financing to the National Crime Agency (NCA) through Suspicious Activity Reports (SARs) under Proceeds of Crime Act 2002 (POCA).
• That any customer information being shared must adhere to the UK GDPR, and where such data is for commercial purposes it could be subject to enforcement action by the Information Commissioners Office.
The ECCTA (Section 211) also extended the Serious Fraud Office’s (SFO) pre-investigative powers under Section 2A of the Criminal Justice Act 1987 to all potential SFO cases.
Read the overview and guidance here.
The FCA has updated the Climate Financial Risk Forum (CFRF) webpage, adding links to three new guides on key areas of climate risk:
• Nature-related Risk: Handbook for Financial Institutions
• Short-term Scenarios
• Mobilising Adaptation Finance to Build Resilience
The handbook on nature-related risk aims to provide an introduction for financial institutions to help frame nature as a risk, and discusses emerging practices in incorporating nature into financial risk management.
Firms can also access further supporting documents:
• Nature-related Risk: Technical Data Guidance for Financial Institutions
• Nature-related Risk: summary document
• Mobilising Adaptation Finance to Build Resilience: summary document
• Adaptation user survey
• Adaptation case studies
HM Government Draft Statutory Instrument (SI): The Consumer Composite Investments (Designated Activities) Regulations 2024
The Consumer Composite Investments (Designated Activities) SI concerns designated activities in relation to Consumer Composite Investments (CCIs), formerly Packaged Retail and Insurance-based Investment Products (PRIIPs).
The designated activities are manufacturing CCIs made available to retail investors located in the UK, advising retail investors located in the UK, or their agent, on CCIs and offering or selling CCIs to retail investors located in the UK.
Access the draft SI here.
FCA speech 'It's Good to be Different: the New FCA Supervisory Strategy for the Financial Advice Sector'
The FCA have published a speech by Nick Hulme (FCA, Head of Department, Advisers, Wealth and Pensions, Consumer Investments). In this speech the regulator highlighted a shift to outcomes and pragmatism post Consumer Duty, noting the aim of removing duplication and rule simplification through the Call for Input (31 October 2024 deadline), working on shared data needs and sharing back best practice.
As noted in the FCA’s Dear CEO letter to financial advisers and investment intermediaries, the new supervisory strategy for the financial advice sector has three strands:
1. Reduce and Prevent Serious Harm
This includes Retirement Income, Ongoing Advice, Capital Deduction for Redress and Consolidation
2. Test and Monitor Under the Consumer Duty
The FCA stated the intention of facilitating an adviser survey to help firms benchmark relative to the market and noted that supervisory teams will be actively engaging where the FCA is aware of bad and poorly evidenced outcomes, noting that vulnerability is a good case in point.
3. Advice Guidance Boundary Review
The regulator noted the three aspects of the joint review (with HM Treasury): clarifying the boundary, targeted support and simplified advice and advised that a consultation paper will be published next year (focused on pensions) and a further consultation on retail investments next year.
Access the full speech here
FCA Speech 'Growth - Mission Possible'
The FCA have published a speech by their Chief Executive Nikhil Rathi, and the key points include:
• The need to need to collaborate to deliver growth and the aim of the FCA to do more to support capital formation, productivity gains and financial services exports.
• Mr Rathi noted the publication of a literature review on links between financial regulation and growth.
• On operational effectiveness, the proposals on more transparent enforcement were noted, with data and case studies on how a public interest test could work in practice to be published next month.
• Digital infrastructure and the importance of a collaborative approach were stated, alongside some in the industry calling for tech positive rather than tech neutral regulators.
• The advice/guidance boundary review was noted as seeking innovation to facilitate access to affordable support.
• The Call for Input was noted as an opportunity to streamline disclosure, affordability or product rules instead of prescriptive rules.
The FCA has launched the AI Lab to support innovators developing new AI models and solutions as part of their innovation services. The lab will also allow deeper understanding of the risks and opportunities AI can present to both UK consumers and markets, the watchdog said.
Read the full speech here.
FCA AI Lab
The lab will also aim to promote the "safe and responsible use" of the technology to drive growth, competitiveness and innovation, with four components: AI Spotlight, AI Sprint, AI Input Zone and Supercharged Sandbox.
AI Spotlight will group together projects that provide a "real-world insight and practical understanding" into how firms are putting AI to use in financial services.
AI Sprint will bring together industry, academics, regulators, technologists and consumer representatives to inform the FCA's approach to AI and how to foster the right environment for growth and innovation.
The FCA has published a blog relating to regulation and the secondary growth objective, noting that helping financial services support growth is a large and complex challenge. In the blog the regulator consider how they can support growth, for example, by way of increase consumer protections, reducing the regulatory burden on industry and what the right balance of risk between consumers and firms should be.
Following a literature review and FCA reviews (PDF) of how the regulator is meeting the secondary objective, the regulator is seeking suggestions for research. Firms with any comments should contact growtheconomics@fca.org.uk.
Read more about the FCA’s AI Lab here.
FCA Blog 'Understanding How Financial Services Regulation Impacts Economic Growth'
Read the blog here.
PRESS RELEASES
PIMFA celebrates winners of its 2024 Diversity & Inclusion Awards
PIMFA WealthTech launches new Tech Sprint on strengthening the industry's cyber security defences
PIMFA sets out 5-year agenda for government to create a UK Culture of Thriving Financial Health
A joint statement between HM Treasury and the State Secretariat for International Finance has been published, noting issues discussed such as economic outlook and financial stability, the Berne Financial Services Agreement (BFSA), sustainable finance, artificial intelligence (AI) and innovation, and, capital markets.
The next meeting is due in H2 2025 and you can read the statement here
PRESS COVERAGE
Financial Technologies Forum: U.K. to Leverage Its 'Second-Mover' T+1 Advantages
Professional Adviser: Majority of under-35s see value in financial advice
Investment Week: 'The million dollar question' for wealth and asset managers as Consumer Duty enters next phase
MORE
October 2024 Virtual Event | 14:00 - 17:30
PIMFA GUIDE ON UNDERSTADING CUSTOMER VULNERABILITY FOR FIRMS LAUNCH EVENT
PIMFA has been working closely with the regulator and member firms this year to understand better the extent and range of vulnerabilities that customers may face and to
ONE MONTH TO GO 21 November 2024 Live Online | 09:30 - 12:30
£400 - £500
PIMFA Live Online Learning: Designing and Implementing A Robust Fraud Strategy
In 2024, The FCA expects your firm to do more to strengthen your systems to detect and prevent fraud.
ensure that firms can correctly identify and support those customers.
As part of our work, we will be launching a PIMFA Guide on Understanding Customer Vulnerability this week, which will be a valuable reference aid and will assist firms with creating vulnerability strategies and implementing processes and procedures that will not only help to meet regulatory obligations but also identify opportunities to enhance how firms serve all their customers.
To mark the publication of the Guide, we are holding a Understanding Customer Vulnerability Guide Launch Event on Thursday, where we will hear from the FCA and a range of industry CEOs and practitioners to discuss the importance of this topic and to share views and best practices.
We still have some places available - you can find out more and view the agenda here.
Please note this is a virtual event which will be live-streamed, or for further information please contact events@pimfa.co.uk.
In a November 2023 Dear CEO Letter to Wealth Managers, the FCA stated that firms have lost significant sums to fraud and urged leadership teams to fully understand their risk exposure and invest the necessary time, energy, and capital to manage it effectively.
In November’s masterclass on ‘Designing and Implementing A Robust Fraud Strategy’, former FCA and SFO experts who have worked on highly complex criminal cases help you design and deploy a fit-for-purpose fraud strategy that adapts to the needs of your firm and, importantly stands up to FCA scrutiny.
By the attending this masterclass you’ll be able to:
• Understand what a robust fraud strategy looks like
• Apply new fraud-related regulatory requirements
• Design systems to prevent and detect fraud
• Develop ongoing monitoring strategies for emerging fraud risks
Contact Us | Visit Website | Terms & Conditions
Unsubscribe | View in Browser
Personal Investment Management & Financial Advice Association (PIMFA)
69 Carter Lane, London, EC4V 5EQ (registered in England No 2991400)
You are receiving this email because you signed up for 'Bulletin', have attended or registered to attend one of our events or learning courses or are part of a PIMFA member firm.
If you no longer want to receive these emails, please update your preferences here.
