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PIMFA WEEKLY NEWS BULLETIN | 4 April 2022 Dear Nigel,
Welcome to the PIMFA Bulletin; grab a coffee and take 10 minutes to read the latest news impacting you and your firm.
Russian invasion of Ukraine: Latest Updates
Financial sanctions measures in relation to Russia Following the Prime Minister’s statement to the House of Commons on 22 February 2022, the UK announced a tranche of sanctions on Russia. The Prime Minister announced further measures on 24 February 2022 which are available on the Foreign, Commonwealth & Development Office website. On 24 March 2022 measures were also taken against Belarus. If you require a licence to permit any activity which would otherwise be prohibited by sanctions regulations, you must contact the relevant department. The FCA expects firms to have established systems and controls to counter the risk that they might be used to further financial crime and this includes compliance with financial sanctions obligations. Where the FCA identifies failings in financial crime systems and controls, the regulator can impose restrictions and/or take enforcement action. Additionally, the Office of Financial Sanctions Implementation (OFSI) has the power to levy civil monetary penalties for breaches of financial sanctions and works with law enforcement for
the most egregious cases, where criminal prosecution may be considered. Firms should screen against the UK Sanctions List to meet these new sanctions measures and screen against the OFSI list of asset freeze targets for financial sanctions obligations. You are legally obliged to report to OFSI if you know or suspect that a breach of financial sanctions has occurred; if a person you are dealing with, directly or indirectly, is a designated person; if you hold any frozen assets; if knowledge or suspicion of these come to you while conducting your business. You must contact OFSI at the earliest opportunity, and you should also notify the FCA. The FCA’s expectations of firms’ systems and controls in relation to compliance with financial sanctions are set out in FCG 7 of our Financial Crime Guide including examples of good and poor practice in relation to firms’ governance, risks assessment and approaches to screening in relation to financial sanctions. Where transactions give rise to concerns about sanctions evasion or money laundering, firms should also consider their obligations to report to the UK Financial Intelligence Unit (UKFIU) at the National Crime Agency (NCA) under the Proceeds of Crime Act 2002.
For firms undertaking trade finance activities the Dear CEO letter from September 2021 provides some additional guidance on sanctions considerations.
For further details on financial sanctions, firms should contact OFSI or, for trade and export sanctions, firms should contact the Department for International Trade’s Economic Control Joint Unit. Applications must be made in advance of any business agreement or transaction taking place.
PIMFA DIVERSITY & INCLUSION AWARDS 2022
Entries are now open! Categories: 1. (Firm) Inclusive Talent Management Award | small - medium firm (1-350 employees) 2. (Firm) Inclusive Talent Management Award | large firm (351+ employees) 3. (Firm) Best D&I Initiative Award | small - medium firm (1-350 employees) 4. (Firm) Best D&I Initiative Award | large firm (351+ employees) 5. (Individual) Rising Talent Award 6. (Non-Firm) Best Industry D&I Initiative 7. (Firm) Best Approach to Wellbeing Award 8. (Individual) The Overall D&I Champion Award 9. (Firm) Best Supplier Award To read more about the awards this year and to submit your entry, please click here.
PIMFA Private Investor Indices Survey
The next Private Investor Indices Survey submissions opens at 9am on 11th April and closes at 5pm on 27th April.
Please visit our website to complete the survey.
PIMFA's Latest Consultation Responses
Our latest Consultation Responses include: •
PIMFA's response the FCA Compensation Framework Review
•
PIMFA’s response to FCA’s Call for Evidence on Improving the Appointed Representatives Regime
•
PIMFA response to A New Consumer Duty – Feedback to CP21/3 and further consultation
Read these and all other PIMFA consultation papers here.
Latest PIMFA Press Releases
Latest PIMFA Press Coverage
National Audit Office report sets out how
BBC: Grieving families face extra fees and
British Steel Pension members were failed
paperwork, says consumer group
in stark detail FT Adviser: Marlene Outrim: ‘A lot of what FCA sets out aims to increase consumer
the FCA is doing is with a broad brush’
confidence in investment market at PIMFA’s Virtual Fest 2022
Daily Telegraph: Is Bitcoin a good investment in 2022?
FCA willingness to engage on FSCS is positive, but real progress sits with the
FT Adviser: Pensions freedoms and BSPS
Government
created 'financial feeding frenzy'
PIMFA’s Virtual Fest adds Shadow
Professional Adviser: FOS compensation
Economic Secretary to the Treasury Tulip
limit increase to £375,000 on 1 April
speaker Siddiq as second keynote International Adviser: UK parliament PIMFA delighted by Government
unveils inquiry into British Steel pension
announcement that it will include paid-for
scandal
Online online adverts within scope of Safety Bill to tackle fraud
Raconteur: Climate change risks and the future of insurance
PIMFA Events
PIMFA EVENT: FINANCIAL CRIME CONFERENCE 18 May The PIMFA Financial Crime 2022 gives attendees access to industry leading debates from professionals across the regulatory, law enforcement, innovators and providers in the Financial Crime space. As the financial crime landscape evolves with new techniques and technologies, the growing threat to firms and their clients is undeniable.
To find out more and register, please click here.
PIMFA Learning
PIMFA WEBINAR: EMERGING THEMES: REGULATORY GUIDANCE FOR WEALTH MANAGERS IN 2022 5 April | 11:00 - 12:00 | FREE TO ATTEND In 2022, Wealth Management firms face a daunting schedule of regulatory changes. ESG, Operational Resilience and Consumer Duty are just a few critical areas amongst many others that are competing for your time, limited budgets and finite resources. In this FREE 60-minute webinar, Worksmart’s Director of Regulation & Market Engagement Julie Pardy and Shoosmith’s Partner in the Dispute Resolution and Litigation team, Daren Allen, make sense of what Risk and Compliance professionals need to know to steer their firms clear of the dangers posed by an increasingly challenging and complex regulatory landscape. Please click here to register.
View Upcoming PIMFA Events & Learning here
Partner Events
18th ANNUAL AML & FINANCIAL CRIME SEMINAR 27 - 28 April Join us at the seminar hosted by Herbert Smith Freehills, providing essential updates from the Home Office, FCA, HMRC, OFSI, FCDO, JMLSG, Companies House, CPS, Met Police and leading cross-industry experts!
The full programme and speaker faculty can be viewed here. Please click here to register and use code 'PIMFA' to get a 10% discount.
Accelerating growth for global green finance
In the first report of its kind taking stock of green finance over the last decade, TheCityUK, with the support of BNP Paribas, has charted the growth of global green finance as the market has multiplied over a hundredfold from $5.2bn in 2012 to $540.6bn in 2021. The report ‘Green finance: a quantitative assessment of market trends’ used data provided by Refinitiv, an LSEG business, and found that. although green finance remains a relatively small part of global financial markets, there has been consistent growth with signs of acceleration in recent years. The share of green finance in total finance has steadily increased from around 0.1% in 2012 to above 4% in 2021.
Green finance transactions continue to be dominated by green bonds. Global green bond annual issuance has risen exponentially over the past decade, increasing from $2.3bn in 2012 to $511.5bn in 2021. From a UK perspective, green bond issuance grew from $1.1bn in 2012 to $37.4bn in 2021; cumulative issuance over the ten years was $65bn.
Global green finance has expanded into areas across green IPOs, green private Equity and green venture capital. Global green IPO activity has been volatile in both volume and
value terms over the past decade but saw a surge in activity in 2021. Cumulatively, there were 129 green IPOs globally over 2012-21, with 30 of these in 2021 alone.
ESG funds have grown steadily over the past decade and have exhibited particularly strong growth since 2020. Green private equity and green pure venture capital (a subset within private equity) both saw standout years in 2017 and 2019.
When comparing green financial markets globally, it becomes clear that total market size plays a significant role in total green finance activity. For example, China and the US host the world’s largest green bond markets, representing 13.6% and 11.6% respectively of total global green bond issuance over 2012-21, although green bonds remain a very small proportion of total bond markets of these countries.
EY Financial Services Brexit Tracker
Almost six years post-referendum and five years on from the UK triggering Article 50, the EY Financial Services Brexit Tracker shows that major Brexit-related operational announcements from financial services firms have stabilised, as strategic commercial decisions are increasingly influenced by wider factors impacting individual business needs and operating models.
According to the latest data from the Tracker, 44% (97 out of 222) of financial services firms have now moved or plan to move some UK operations and/or staff to the EU. The total number of announced Brexit-related job relocations from the UK to Europe has fallen to just above 7,000 in the last quarter, from 7,600 in March 2021, and 10,500 in March 2017 after Article 50 was triggered. In the immediate months after the referendum in 2016, the total number of planned jobs leaving the UK, according to public pronouncements, reached 12,500 as many firms, particularly those in the investment banking sector, prepared for a possible ‘hard Brexit’.
Conversely, the number of new hires which have been publicly linked to Brexit since the referendum across Europe (2,900) and the UK (2,500) has risen to 5,400, from just over 5,000 last quarter (October – December 2021). The increase is predominantly driven by an uptick in the number of staff hired in London.
When it comes to the number of people who have been, or plan to be, relocated to one
single destination, Paris scores highest, attracting around 2,800 UK employees, followed by Frankfurt (around 1,800) and Dublin (around 1,200). Frankfurt and Paris are the most popular relocation destinations for the banking sector, attracting 19 and 15 investment banks respectively, whereas wealth and asset managers have primarily chosen Dublin (18 companies) and Luxembourg (14 companies). Insurers have opted for a variety of different locations, including Dublin (6), Brussels (4), Luxembourg (4) and Paris (2).
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