PIMFA Weekly News Bulletin - 27 November 2023 by PIMFA

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PIMFA WEEKLY NEWS BULLETIN 27 November 2023

PIMFA Webinar: The Autumn Statement (Member only) What are the implications for retail investors and a future general election?

Last Wednesday, the Chancellor of the Exchequer delivered his tax and spending priorities, outlining 110 measures designed to boost UK economic growth. Of these measures, there were several of specific focus and relevance for our sector, such as the abolition of the Lifetime Allowance, a draft Statutory Instrument for creating a new disclosure framework for UK retail investors, and an intention to consult on changes to the ISA regime (such as allowing certain fractional shares as eligible ISA investments).

27th November | 15:00 - 16:00 |Free If you want to understand the impact of these announcements and the broader Autumn Statement for the Wealth Management and Advice sector, members can join us for a free webinar on Monday, 27th November, at 3 pm, with Iona Martin, Head of Private Banking Tax, KPMG, and David Ostojitch, PIMFA's Director of Government Relations and Policy.

Book Now

Government opens call for evidence on ‘pot for life’ As part of its Budget announcement, the government has opened a call for evidence on the use of a pot for life in order to end the proliferation of small pension pots in the market. PIMFA intends to respond to this consultation but would welcome views from firms on the efficacy of these proposals. Please contact Simon Harrington should you have views.

New PIMFA Guest Blog from Know Your Funds - ESG Oversight: Walking the Tightrope Between Promise and Peril Greenwashing in the ESG space has far-reaching consequences, such as reputational damage, dissatisfaction among investors, and likely legal, regulatory and financial ramifications. In this blog, James Pearce argues the need for improved, automated supervision systems that provide accurate, detailed, and transparent ESG reporting and analysis. The blog can be read here.

Operations Forum The next Operations Forum will take place online on Tuesday, 28th November from 3pm to 4pm. The agenda includes:

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Crest update from Charlie Pugh, Programme Office manager and Glenn Cooper, Product Manager at Euroclear.

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'LSEG: Capital Markets and Regulatory Reform Update' from William Fenna, Head of Retail Intermediaries, Equities, Capital Markets, and Marcus Stuttard, Head of AIM and UK Primary Markets at the London Stock Exchange.

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The PIMFA Forums are open to representatives from all PIMFA Members and Associate firms.

If you or any of your colleagues would like to attend the Operations Forum and are not currently on our distribution list, please email Heidi Bryant.

Alternative Investment Fund Designation Bill The Alternative Investment Fund Designation Bill, a Private Members' Bill, has started in the House of Lords. The Bill (sponsored by Conservative life peer, Baroness Ros Altman) aims to amend the Alternative Investment Fund Managers Regulations 2013 to remove Listed Investment Companies from Alternative Investment Fund designation. See links below for further information: ·

explanatory notes

record of the first reading

the minutes of proceedings

FCA consultation on regulatory fees and levies The FCA has published a new consultation setting out their policy proposals for 2024/25 on the regulatory fees and levies. At the same time, the FCA is also consulting on some adjustments to the rules affecting the FOS and FSCS levies. The consultation is open until 16th January 2024 and can be accessed here. Please contact Simon Harrington for more details and for any input.

Following March’s successful Roadshow, the PIMFA team are heading back to Bristol for another Regional on 14th December. This free event will provide attendees with the opportunity to hear rom subject matter experts on relevant industry topics (earn up to 3 hours Of CPD) and network.

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FCA statement on Pension Value for Money

The FCA has released a statement regarding the Value for Money Pensions Framework consultation. The FCA expects a framework in which pension savers can be confident that their scheme delivers value regardless of where they’re invested. The FCA is aware that short term cost can dominate decision making in the context of defined contribution (DC) schemes and reminds firms that investment choices significantly impact consumer outcomes. In Spring 2024, the FCA will consult on detailed rules for a new Framework for DC workplace pension which is designed to shift the focus from cost to longer-term value for pension savers. To read the FCA statement in full, please access here.

Financial Action Task Force report - Illicit Financial Flows from Cyber-Enabled Fraud The Financial Action Task Force has published a report on Cyber-enabled fraud (CEF) involving Money laundering (ML) groups and professional enablers.

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The publication notes that technology has allowed CEF criminals to develop and increase the scale, scope, and speed of their illicit activities

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The report also includes a list of risk indicators, as well as anti-fraud requirements and controls, that may be helpful for public and private sector entities to detect and prevent CEF and related ML

• The publication can be accessed here

UK Retail Disclosure Framework – Draft SI and Policy Note The government has published draft legislation which will replace the EU-inherited PRIIPs Regulation with a new UK retail disclosure framework. The legislation will enable the FCA to deliver new rules which are more proportionate and tailored to UK markets.

The government has also confirmed it intends to:

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Apply the new UK retail disclosure framework to unauthorised firms and overseas funds offering their products to UK retail investors.

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Reflect the significant reform of the new framework by renaming PRIIPs to Consumer Composite Investments (CCIs).

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Bring forward the repeal of relevant provisions in MiFID alongside its replacement of the PRIIPs Regulation to enable the FCA to holistically reform cost disclosure – responding to industry concerns regarding the impact of cost disclosure rules on the investment trust sector.

The draft legislation and accompanying policy note are available here. Technical comment on the draft SI should be submitted by 10th January 2024.

Government response to the consultation on Digital Securities Sandbox

The Government has confirmed its final approach to implementing the Digital Securities Sandbox, which will facilitate the use of digital assets in financial markets. The document summarises the feedback on the consultation published in Q3 2023 and sets out the Government’s response.

Following the Government response, a draft statutory instrument will be laid before Parliament in due course. To read the Government response, please access here..

FCA finds further work required to fully embed ‘Guiding Principles’ for ESG and sustainable investment funds The FCA has published a review setting out how Authorised Fund Managers (AFMs) comply with existing regulatory requirements and expectations on the design, delivery and disclosure of Environmental, Social and Governance (ESG) and sustainable investment funds. They found that many firms still have further to go to meet expectations, particularly around the disclosure and clarity of information given to retail investors, and expect firms to address the good and poor practices outlined in the report to meet the requirements of SDR and the Consumer Duty. The regulator review found evidence of good practice, such as the development and use of appropriate ESG and sustainability scoring systems and benchmarks and also highlighted good practice where AFMs conducted thorough due diligence on third party data providers. Examples of poor practice include:

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Products were inconsistently aligned with their ESG and sustainability goals even if they referenced them in their name.

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In some instances, fund holdings appeared inconsistent with a fund’s ESG or sustainability objectives, and some AFMs weren’t able to explain how these investments fit with their goals.

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Key ESG and sustainability information was often not explained, put into context or included in disclosures, meaning relevant information was not immediately or clearly accessible to investors.

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The design of AFMs’ stewardship approaches did not meet the FCA’s expectations. It was often difficult to identify the exact aim of the stewardship activities, how the activities were aligned to fund objectives, and examples of the progress they made against those aims.

Firms are expected to assess how they are meeting the FCA rules and guidance in relation to their ESG and sustainable investment funds. This will also be a useful exercise to prepare for the proposed SDR and investment labels regime.

ISITC Europe T+1 Accelerated Settlement Challenges - Roundtable series in association with the CISI, the IA and PIMFA - kindly hosted by EY. With the US markets planning to move to T+1 for equities settlement in May 2024, and the UK Accelerated Settlement Taskforce looking at when the UK could follow suit, the ISITC Europe T+1 Forum has arranged a series of roundtables to facilitate an in-depth, cross-industry understanding of the business, technology and process challenges T+1 could bring to the UK market, and to explore potential solutions.

These roundtables are designed to increase industry knowledge and understanding of the impact of T+1 settlement, to explore solutions, assist with strategic planning and development, and to find a successful path to T+1 settlement implementation for everyone. The fourth T+1 roundtable focuses on Data Challenges. Date: Wednesday 29 November 2023 - 12.15 - 12:45 lunch, 12:45 opening address, 14:15 close Venue: EY, 25 Churchill Place, Canary Wharf, London, E14 5EY Data quality and data access on an industry-wide scale has always been a significant problem and with a shorter settlement cycle, these challenges will be magnified. The aim of this roundtable is to understand and define the issues across the transaction chain and to explore possible solutions. To register to attend this roundtable, please click here: isitc-europe.com/data-challenges/ Please note - ISITC Europe and the trade associations are planning a T+1 roundtable which will focus on the issues and challenges for Wealth Management and Retail Investment firms. This roundtable will take place in Q1 2024 - we will publish full details in Bulletin when the agenda, venue and date are agreed.

PRESS RELEASES

PRESS COVERAGE

Greater personalisation may

Professional Adviser: Personalised

encourage greater saving & investing

advice may encourage greater

in UK, although there are limits to

saving and investing

how much, PIMFA research finds FT Adviser: Personalisation may PIMFA welcomes Financial Services

encourage greater saving and

Compensation Scheme levy forecast

investing

for 2024/25 Reuters: OPINION: Hard work on PIMFA continues to urge for FCA to

Online Safety Act is only just beginning - PIMFA

have a role in combatting fraud IFA Magazine: Greater PIMFA WealthTech partners with

personalisation may encourage

WealthOS in latest Tech Sprint on

greater saving & investing in UK

the Client Onboarding process

although there are limits to how much, PIMFA research finds