PIMFA Weekly News Bulletin - 29 April 2024

Featured: PIMFA partners with financial services trade associations in letter to Chancellor 29 April 2024 View in browser

PIMFA WEEKLY BULLETIN

PRESS RELEASES ABOUT PIMFA CONSUMER DUTY WEALTHTECH

PIMFA partners with financial services trade associations in letter to Chancellor opposing FCA enforcement proposals

On Friday, PIMFA joined with 15 other financial services trade associations, including UK Finance, TheCityUK and the Association of British Insurers (ABI), in calling for the Chancellor of the Exchequer to intervene over the Financial Conduct Authority’s (FCA) proposals to publicise enforcement investigations of firms.

In a joint letter to the Chancellor, the trade bodies warned that the FCA’s proposals - outlined in its consultation paper P24/2: FCA approach to Enforcement - to publicise enforcement investigations, as opposed to enforcement action, could cause damage to consumer trust and confidence in the financial services industry and destabilise financial markets and firms alike, making the UK a less attractive place for investors or those who come to do business.

For smaller firms, the impact could be devastating, with clients leaving in droves despite there being no immediate evidence of actual wrongdoing on the part of the firm. Larger listed firms will almost certainly be subject to significant market volatility because of shareholder action or could see significant outflows of assets – potentially leaving them hollowed out.

Liz Field, Chief Executive of PIMFA, commented: “We cannot understand how these proposals support the FCA’s role of promoting UK competitiveness and economic growth, while ensuring consumer confidence through the way in which it supervises and regulates the industry. The proposals appear to contradict the former and do little to promote the latter.”

PIMFA Regulatory Forum

The next Regulatory Forum will take place online on Tuesday, 30th April from 3pm. to 4pm.

The agenda items include updates on:

• FCA CP 24/7 Investment Research Payment Optionality

• FCA finalised guidance on the Anti-greenwashing rule

• FCA CP 24/8 Extending the Sustainability Disclosure Requirements (SDR) regime to Portfolio Management

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 Regulatory Forum and are not currently on our distribution list, please email Heidi Bryant.

Extending the Sustainability Disclosure Requirements (SDR) regime to Portfolio Management (CP24/8)

The FCA is consulting on extending the Sustainability Disclosure Requirements (SDR) and investment labels regime to portfolio management. The regulator is proposing to apply a broadly similar approach to labelling for portfolio managers as introduced for fund managers, to have a consistent approach and create a level playing field. This would mean applying the labelling regime, naming and marketing rules, and disclosure requirements to portfolio managers.

This consultation closes on 14 June 2024. PIMFA will be providing a response. If you would like to get involved and contribute, please contact Maja Erceg FCA publishes Big Tech and AI updates

Big Tech

The FCA has published feedback to it's call for input on data asymmetry between Big Tech firms and financial services firms.

Big Tech’s emergence in financial services has improved things for consumers, but there is a risk that a lack of data sharing could limit future competition and delay innovation. The FCA now wants to encourage Big Tech to come forward so it can work with them to examine if their data would be valuable in retail financial markets. It will also continue to monitor Big Tech firms and market developments, through its work with the Digital Regulation Cooperation Forum (DRCF) and international counterparts.

Artificial Intelligence

The FCA has also outlined its approach to AI following the Government’s publication of its pro-innovation strategy on AI, including its work so far and plans for the next 12 months.

It continues to deepen its understanding of the potential impact of AI on financial services and remain committed to ensuring that AI in UK financial markets is used safely and responsibly, while creating the conditions for beneficial innovation. It will continue to collaborate with the Bank of England, PSR, DRCF and with international and global peers, such as IOSCO and the FSB.

FCA CP24/9: Financial Crime Updates

The FCA has published a Consultation Paper on proposed changes to their Financial Crime Guide (FCG).

The proposals focus on areas where there have been recent developments, such as sanctions, proliferation financing, transaction monitoring and cryptoassets.

The FCA will also be adding references to Consumer Duty, along with consequential changes throughout the guide.

The consultation closes on 27 June 2024. If you have any comments or views, please get in touch with Alexandra Roberts

FCA Chief Executive: response to the Government’s White Paper on Artificial Intelligence (AI)

Nikhil Rathi’s speech at a Digital Regulation Cooperation Forum (DRCF) event outlined his focus on Big Tech (as Chair of the DRCF) as well as the FCA’s response to the Government’s White Paper on Artificial Intelligence (AI)

Key points:

• The Prime Minister has signalled that the future of AI relies on the development of safe AI with legislative foundations being laid through the Digital Markets, Competition and Consumers Bill, Data Protection and Digital Information Bill and the introduction of the Online Safety Act

• Outstanding issues of trust and transparency around the use of data, the trust of AI and of Big Tech were noted, alongside implications for privacy.

• The FCA’s approach aims to be proportionate and support innovation with collaboration with industry through forums such as the DRCF AI and Digital Hub (enabling innovators to get advice on issues that cross more than one DRCF regulator’s remit).

Read the full speech here

FCA’s new Form A

The FCA’s Form A is changing. The new improved Form A (used for Senior Management Function and Controlled Function applications) is now being rolled out to all firms.

In their Business Plan the FCA committed to making it quicker and easier for firms to apply for authorisation. Feedback from firms has indicated that the new version is clearer and much easier to use.

Some of the changes may affect your internal templates and processes. Changes you need to be aware of:

• to remove duplication in the employment history section you will no longer need to upload a CV (solo regulated firms only)

• you will need to provide 10 years of employment history

• the send later function has been removed

• depending on your answers, you may also be asked new questions on rights to work in the UK, previous names to be displayed on the Register, candidate time spent on activities and spread across Directorships (where necessary).

Existing draft applications will not be affected.

From this week

The changes will apply to all new standalone applications (those not submitted as part of an application for something else). This includes standalone Appointed Representative applications.

From May 24

The changes will apply to new related applications (e.g. applying for Authorisation for the first time, for a Variation of Permission or to add or amend Appointed Representatives)

The FCA webpage gives more information on other improvements made based on industry feedback.ck.

FCA: Appointed Representatives (credit brokering) – good practice and areas for improvement

The FCA has published examples of good practice and areas for improvement, following its assessment of the key harms and drivers of harm caused by Appointed Representatives (ARs), including Introducer Appointed Representatives (IARs), that undertake credit broking.

Although these examples concern credit broking, the FCA expects all principal firms conducting regulated activities to consider these findings and address any gaps during their initial and ongoing monitoring of ARs.

Access the publication here

Financial Services Skills Commission (FSSC) publishes its 3rd Future Skills report

Last week the Financial Services Skills Commission (FSSC) published its 3rd Future Skills report titled ‘Bridging the skills gap in a rapidly evolving sector’ The report provides insights into current skills trends and analysis on how the financial services sector is responding to ongoing skills and talent challenges. The findings are based on the FSSC 2023, member survey research, data from the EY Skills Foundry, AI Eightfold and ONS. You can access the report here

Key report findings include:

Skills gaps remain prevalent across our industry despite easing recruitment pressures. Demand for all future skills is growing faster than supply except for data analytics and insights. Machine learning & AI skills show the biggest supply-demand gap for our members.

We are seeing a declining number of graduates entering financial services from 8% to 4% according to the latest available data for 2020/2021.

See what PIMFA is doing in this important area here

FCA: Complaints data

Accelerated Settlement Taskforce Report - UK T+1 settlement

The latest report from the UK Accelerated Settlement Taskforce can be found here

The Taskforce has now established a Technical Group, with a series of workstreams looking at the potential impact of T+1 on different business areas.

In the Taskforce report, it is proposed that the 'live' date for T+1 in the UK should be before the end of 2027.

A specific 'live' date should be confirmed by the Technical Group when it reports by the end of 2024.

If you are interested in getting involved in PIMFA's T+1 Working Group, or joining one of the Taskforce's workstreams, please contact Kevin Sloane

The Financial Conduct Authority (FCA) has published its six monthly Complaints data, providing firm-specific data for individual firms and aggregate data at market-level.

Key findings

In 2023 H2, financial services firms received 1.87m complaints, a decrease of 1% from 2023 H1 (1.89m).

Product groups that experienced an increase in their complaint numbers were:

• banking and credit cards - up 3.2% from 847,497 (2023 H1) to 874,568 (2023 H2)

• home finance - up 3.7% from 91,470 (2023 H1) to 94,822 (2023 H2)

• investments - up 3.4% from 59,417 (2023 H1) to 61,446 (2023 H2)

Product groups that experienced a decrease in their complaint numbers were:

• decumulation & pensions - down 2.8% from 88,058 (2023 H1) to 85,547 (2023 H2)

• insurance & pure protection - down 5.8% from 800,253 (2023 H1) to 753,192 (2023 H2)

The percentage of complaints upheld decreased from 61% in 2023 H1 to 58% in 2023 H2.

Access the FCA’s firm specific complaints data here and aggregate complaints data here.

House of Lords Financial Services Regulation Committee: Financial Conduct Authority’s enforcement proposals

The House of Lords Financial Services Regulation Committee has published a letter calling on the Financial Conduct Authority to reconsider proposals to name firms under investigation by the regulator, stating this could risk the integrity of the market.

Read the full letter here.

FCA confirms anti-greenwashing guidance

Ahead of the anti-greenwashing rule coming into force on 31 May 2024, the FCA has published anti-greenwashing guidance to help firms understand and comply with the anti-greenwashing rule.

The rule and guidance are intended to complement and be consistent with existing rules and expectations. All authorised firms need to meet the anti-greenwashing rule on 31 May 2024.

The regulator’s aim is to protect consumers against greenwashing so they can make informed decisions that are aligned with their sustainability preferences. The anti-greenwashing rule aims to clarify to firms that sustainability-related claims about their products and services must be fair, clear and not misleading.

PRESS RELEASES

Culture in financial services still needs to improve to better serve women

PIMFA urges Financial Conduct Authority to provide firms with the

PIMFA WealthTech and Morningstar invite FinTechs to showcase ESG...

PIMFA welcomes FCA proposals for Sustainability Disclosure...

PIMFA welcomes the Financial Conduct Authority’s proposals for...

READ MORE

PRESS COVERAGE

Citywire New Model Adviser: FCA hit with backlash...

Professional Adviser: Editor's View: The consolidation news keeps on...

Professional Adviser: Justine Randall: There has never been a better time...

Investment Week: FCA's Sheree Howard: Firms' culture must change...

FT Adviser: FCA: Industry in danger of ‘going backwards’ with female

READ MORE

PIMFA LEARNING

14 May 2024

Live Online Learning | 09:00 - 12:30

£2,750 - £3,250

CASS ARCHITECTURE: KNOWING WHAT YOU NEED TO KNOW

The PIMFA CASS Clients Academy (CCA) 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.

CCA rapidly upskills CASS Officers, Operations, Compliance, Certification Function Holders, and Custodians to manage your next CASS audit and withstand scrutiny from regulators, auditors and senior managers.

Buy one place, get one FREE: Please enter code CASS2024 at checkout for 50% OFF two tickets.

23 May 2024

Live Event | 10:00 - 17:00

£225 - £550

PIMFA FINANCIAL CRIME CONFERENCE

The PIMFA Financial Crime Conference is returning in 2024 and will aim to update attendees on the evolving financial crime landscape.

Firms and their clients remain at risk and the event will aim to give PIMFA members the know how to protect themselves.

Attendees will get access to industry leading debates from professionals across the regulatory and law enforcement in the Financial Crime space, as they discuss the current threat landscape emerging from new techniques and technologies, and what can be done to operate in a safer and more resilient environment.

We are offering an exclusive 25% discount on group bookings of 3 or more. Please enter code MWBJFUQ4 on checkout.

REGISTER HERE REGISTER HERE

You have received this email because you are subscribed to 'Bulletin'. If you no longer want to receive these emails, please update your preferences here.