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PIMFA WEEKLY NEWS BULLETIN | 23 November 2020 Dear Nigel Welcome to the PIMFA Bulletin, grab a coffee and take 10 minutes to read this week's latest industry news impacting you and your firm.
LATEST NEWS
Brexit Negotiations
EU Brexit Contingency Planning
The UK and EU Chief Negotiators have
Belgium, France and the Netherlands
decided to suspend Brexit negotiations “at
have asked the European Commission
our level” and “for a short period” after an
(EC) to step up its contingency planning
EU negotiator tested positive
for a no-deal Brexit. During the video
for coronavirus. The two teams “will
summit of the EU heads of state or
continue their work in full respect of
government on 19 November, the leaders
guidelines and the talks will resume in
were given a state of play briefing on the
person when it is judged safe to do so”.
Brexit negotiations and concluded that planning for a no deal should take place in
Some progress has been made in the
parallel with the talks.
talks over past weeks on converting the agreement into legal text but familiar gaps
The EC has been reluctant to do this so
remain on fishing, level playing field and
far, as it felt this could be seen as a sign
governance. The differences are long-
that the EU has lost faith in reaching a
standing and achieving any movement
negotiated deal.
may require a political intervention at the highest level to unlock a compromise - if one is to be found at all. Any future deal
Equivalence
needs to be translated, proof read and then ratified by both UK and EU parliaments and time is running out. Edwin Schooling Latter, FCA Executive Director for Wholesale Markets, told a parliamentary Committee this week that European Central Bank
the UK will diverge from EU securities rules only in “exceptional” circumstances, given that the UK played a key role in
The European Central Bank (ECB) warns
shaping MiFID securities rules and still
banks this week to prepare for Brexit. With
supports their objectives. The EU has not
the end of the transition period
said if it will grant equivalence to the UK
approaching fast and the Brexit
and allow financial services firms better
negotiations ongoing, the ECB says banks
access to the EU Single Market. So far,
must continue to use the remaining time to
the European Commission has granted
ensure that they are fully ready for the
only one equivalence decision in favour of
regime change, including having a
the UK, recognising UK clearing houses
physical presence in the EU to the extent
so EEA firms can use them for derivatives
necessary as a prerequisite for achieving
transactions.
prudent risk management and effective supervision.
The EU insists it will only make decisions on equivalence once the UK has provided
Moving assets and staff is an important
information on how far it will diverge from
step, but the ECB also expects banks to
the EU rules post the Brexit transition
be structurally profitable and operationally
period.
self-standing, in particular by not relying excessively on back-to-back set-ups with entities in third countries for their risk
Future of Financial Services
management. The ECB says that EU
Inquiry
products and transactions with EU clients involving non-EU products should be booked in the EU. The Treasury Committee has launched an inquiry into the future of financial services after the Brexit transition period ends. It Deadline for reforms in the Financial Services Bill
will examine how financial services regulations should be set and scrutinised by Parliament, as EU directives will cease to govern new rules and regulations.
HM Treasury, the FCA and the PRA have released a joint statement declaring that
It will also consider how regulators are
the deadline for implementation of the
funded and the extent to which financial
prudential reforms contained in the
services regulation should be consumer-
Financial Services Bill (including the new
focused. The deadline for submitting
prudential rules for investment firms) is set
evidence is 8 January 2021.
at 1 January 2022. PIMFA in the Press
Read the full statement here.
New Swiss National Services Act
•
Mail on Sunday/Thisismoney.co.uk: Small shareholders being 'robbed' by
The new Swiss Financial Services Act
City rule blocking them from
(FinSA), which came into force on 1
investing in shares worth billions in
January 2020 requires client advisers of
pandemic
foreign financial service providers carrying
•
MoneyMail/Thisismoney.co.uk:
out their activity in Switzerland to enter in
Why thousands can't cash in their
a register of advisers. This requirement
pension: Savers struggle to hire
applies to client advisers of foreign
financial intermediaries providing cross-
financial advisers after watchdog
border investment services in or into
cracks down on transfers
Switzerland, unless targeting exclusively
•
professional or institutional clients or acting solely on a reverse solicitation
Professional Adviser: Brexit: How are advisers preparing clients?
•
basis.
Money Marketing: FCA probes wealth firms’ readiness for negative rates
Applications for registration must be
•
entered by January 2021 at the latest.
ESG Clarity: Industry says UK’s £12bn climate plan welcome but ‘not enough’
PIMFA’s Guide to Remuneration
•
Actuarial Post: PIMFA looks to the future and updates member manifesto
As part of a series of guides to provide support for members, PIMFA has published a Guide on Remuneration.
Latest PIMFA Press Releases
Section 1 of the Guide provides an overview of the remuneration rules that currently affect our member firms, whilst
•
PIMFA hosts first in series of
Section 2 sets out a summary of the
masterclasses to encourage
anticipated changes that are soon due to
young women from all
take place, following on from the
backgrounds to consider a career
introduction of the new prudential regime,
in finance
which will also bring changes to the
•
Senior Wealth management and financial advice figures gather for
remuneration provisions.
PIMFA's virtual leadership summit You can read the members only Guide to
•
PIMFA calls for the approval of
Remuneration here* -
unregulated financial promotions
(*member log in required/get a password
to be a regulated activity
reminder).
•
PIMFA welcomes first reading of Financial Services Bill
PIMFA sets out priorities for the future as it updates Member Manifesto
PIMFA has updated its Members’ Manifesto following consultation with members and the fast-paced development of the industry, further accelerated through the Covid-19
pandemic. Each of the six pillars remain central to the focus of PIMFA with specific objectives outlined in each area.
The Financial Services Compensation Scheme (FSCS) levy, Professional Indemnity Insurance (PII) and the Future of Supervision are listed as top priority , building on themes laid out in our policy paper on ‘The Future of Supervision’ released earlier this year and our recent FSCS research report. In the coming year PIMFA will also particularly focus on the future of the sector and issues such as the impact of Brexit, Environmental Social and Governance investing, digital transformation, diversity and inclusion and talent. This year PIMFA has undertaken various projects in these areas such as; the launch of the ESG Academy, the Authentic Leadership programme; career masterclasses for young women and girls with our partners at The Brokerage – alongside various Brexit communications and our work on financial and mental wellbeing; pensions and scams.
Read the Manifesto or full press release.
Latest PIMFA Consultation Response
PIMFA’s latest consultation response is to the FCA on the Liquidity Mismatch in Authorised Open-ended Property Funds.
Read this and all of our other PIMFA consultation papers here.
EVENTS & LEARNING
PIMFA Training Getting the DB Pension transfer advice process right 24 November 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 SM&CR Conduct Rules: Train the Trainer Programme 10 December This training workshop and toolkit is ideal for firms that want to: • Feel confident you have delivered a high standard training course in line with the FCA’s requirements • Train all certified staff on the Conduct Rules by 31st March 2021 • Provide a refresher Conduct Rules training session for senior managers • Tailor their firms Conduct Rules training to specific staff job roles • Train an unlimited number of your staff on the Conduct Rules for a single, one off payment • Receive fully editable training course materials that can be personalised by you for your firm • Utilise the SM&CR resources that are used in over 30 banks and Building Societies For more info and to book your place, please click here.
PIMFA Training What does good 'Training and Competency' look like in your firm under COVID-19? 14 December What are the key learning objectives of the course? Training and competence requirements are not static they are ongoing and must be demonstrated as a continuing process to reflect the current climate. The regulator expect no less of regulated firms. This practical online training session provides professionals who are involved in the design, implementation or overseeing of T&C with the knowledge to help develop and adapt a successful T&C Framework and approach for a displaced workforce. For more info and to book your place, please click here.
PIMFA Online Conference Virtual Fest V2 27- 28 January 2021 Following on from the HUGE success of the inaugural PIMFA Virtual Fest in June 2020, we are proud to announce that bookings are now open for Virtual Fest V2. Taking place over two days (27 & 28 January 2021) the event will deliver presentations on key areas which members have identified as their key short- and long-term focus including:
• Compliance • Risk and Resilience • ESG and Impact Investing • Cyber Resilience For more info and to book your place please click here
WHAT'S HAPPENING IN OUR INDUSTRY
PIMFA are delighted to be joining 75 speakers at INTERGEN2020, an immersive virtual conference taking place w/c 30th November. A limited number of places are available for PIMFA Members. To join, please click here.
FCA on Brexit preparation
Speaking at the UK’s Regulatory Regime for Financial Services Summit about the end of the Brexit transition, Nausicaa Delfas, the Executive Director of International at the FCA, said the financial services sector should not be complacent and should continue to prepare for the end of the transition period. The FCA will ensure that the regulatory approach to financial services remains effective and appropriate post Brexit and that the UK builds on
its global standing whilst demonstrating its commitment to open markets, free trade, and the highest international standards of regulation.
Delfas also warned of two risks that could affect financial-services trading in a potential nodeal Brexit; firstly, a lack of data adequacy approval, which may hamper the transfer of personal data and, secondly, a lack of EU-wide permissions which would allow UKregulated firms to take on EU clients. Delfas warned that, in some cases, it will not be possible for UK firms to continue servicing their contracts with EU resident customers, and said “because it’s a patchwork solution, there are bound to be some areas of disruption.”
Brexit Preparedness for PIMFA firms
The Brexit transition period ends on 31 December 2020. Regardless of the outcome of the UK – EU negotiations on the terms of the future relationship, firms with clients in the EU will need to adjust to operating from a third country in relation to the EU. Retail financial services firms cannot rely on pan-European set of rules for servicing customers in the EU and, with passporting lost and no equivalence available in the retail investment sector, the options for PIMFA firms to continue cross border trade with the EU are limited and mostly dependent on the approaches adopted by national regulators in the EU Member States.
It is important that firms communicate any post Brexit changes in their business model to customers, speak to local EU regulators and ensure they understand the national regulator’s approach and the impact it will have on their business post Brexit transition.
FCA Defined Benefit (DB) Transfer Advice Data Request
The FCA issued a DB data request on 1 July 2020 to 1965 firms who held DB permissions. This covered the period from 1 Oct 2018 to 31 March 2020.
They are now issuing a further request covering the period from 1 April 2020 to 30 September 2020 (6 months). However, any firms who failed to respond to their previous request in July will be required to complete the request for the full period from 1 October 2018 to 30 September 2020 (24 months).
The FCA are contacting all firms who hold permission to advise on DB pension transfers and other safeguarded benefits, requesting further data to allow them to continue to understand the shape of the entire DB transfer advice market.
Their new request was issued on 18 November 2020 at 2pm, asking firms to submit their response by 11 December 2020.
The FCA have asked us to make members aware that the request is genuine and was issued from the following email address: pensiontransfers@fca.org.uk.
Contact Us
Bulletin contains the latest industry news and updates on key issues PIMFA are working on for members. If you have queries on our work, or anything in Bulletin, please contact us at info@pimfa.co.uk. BECOME A MEMBER Find out more about becoming a PIMFA member here.
Read our membership brochure or chat to our team at membership@pimfa.co.uk.
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