PIMFA Weekly News Bulletin - 7 May 2024

Featured: New PIMFA paper: How to produce an effective Consumer Duty board report 07 May 2024

PIMFA WEEKLY BULLETIN

PRESS RELEASES ABOUT PIMFA CONSUMER DUTY WEALTHTECH

New PIMFA paper: How to produce an effective Consumer Duty board report

The Financial Conduct Authority has made it clear that the Board report is an area of focus to be used “to assess and evidence how firms have provided good outcomes for consumers under the Duty”.

As the deadline for the first Board reports approaches (31 July 2024) PIMFA are delighted to share our latest paper created in partnership with Associate Members Alpha FMC on How to produce an effective consumer duty board report.

The paper sets out some of the aims and key requirements for an effective Board report, providing valuable guidance on the possible structure of the report and the Management Information (MI) and governance required.

Firms can access the paper here

PIMFA raises concerns in response to FCA CP24/2: FCA approach to Enforcement

PIMFA responded to this consultation, which closed on Tuesday 30 April.

In our response we told the FCA that, while we support the principle of an empowered, assertive and proactive regulator, we share the concerns expressed across the financial services industry about the likely negative impacts the proposal to publicise the name of firms at the start of an investigation will have on the named firms and on the functioning of markets.

Our concerns relate to the following:

• We are concerned the proposal will damage the competitiveness of the UK’s financial services sector as investors are driven away, with the UK diminishing its attractiveness to business.

• Larger listed firms subject to public enforcement activity will almost certainly be subject to significant market volatility as a result of shareholder action

• An investigation announcement will have a severe reputational impact on the firm in question, its staff and its customers, particularly when exacerbated by press speculation

We believe that the FCA’s objectives can be achieved by publishing the same details about enforcement investigations on an anonymised basis, referencing the firm's sector and type of business. Publishing the rule breaches being investigated and details of the misconduct would achieve the required deterrent and educational aim and equally show that the FCA ‘is on the case’ and proceeding with enforcement actions without the detrimental effect on firms and the market.

PIMFA Operations Forum recording - Thursday 25 April

The April Operations Forum has now been posted on thePIMFA website. The recording includes:

• CREST update – latest news from Euroclear - Charlie Pugh, Euroclear

• Regulatory update – David Ostojitsch, PIMFA

• Compeer presentation – James Brown, Head of Client Services, Compeer

If you are from a PIMFA member or associate firm and would like to be added to the distribution list to attend the next Operations Forum on Monday 20 May from 3pm to 4pm please contact Heidi Bryant

PIMFA Regulatory Forum recording - Tuesday 30 April

The April Regulatory Forum has now been posted on the PIMFA website. The recording includes:

• CA CP 24/7 Investment Research Payment Optionality

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

• FCA finalised guidance on the Anti-greenwashing rule

If you are from a PIMFA member or associate firm and would like to be added to the distribution list to attend the next Regulatory Forum on Wednesday 22 May from 3pm to 4pm please contact Heidi Bryant

Office of Financial Sanctions Implementation: additional guidance published

The Office of Financial Sanctions Implementation (OFSI) has launched additional guidance aimed at providing technical support to industry partners and the public.

• OFSI strongly recommends that firms review the FAQs alongside existing guidance and legislation, which take precedence.

• For specific cases, OFSI also advises firms to seek independent legal advice. Access the guidance and FAQs.

HM Treasury: Anti-money laundering and countering the financing of terrorismsupervision report

• HM Treasury has published eleventh annual supervision report providing information about the performance of anti-money laundering (AML) and counterterrorist financing (CTF) supervisors between 6 April 2022 – 5 April 2023.

• The report consolidates and reviews data provided by each AML/CTF designated supervisor, and highlights any notable changes in supervisory activity and any fines that supervisors have issued.

Access the report

HM Treasury and Financial Conduct Authority: Overseas Fund Regime

HM Treasury (HMT) and the Financial Conduct Authority (FCA) have jointly issued a roadmap for implementing the Overseas Fund Regime (OFR) for certain funds from the European Economic Area (EEA):

• The new regime applies to overseas investment funds, allowing them to apply to become recognised in the UK and marketed to British investors with the assurance that they come from a country with equivalent consumer protections.

• By streamlining the process for overseas investment funds, UK investors will have more choices in a competitive investment landscape, and it will help to maintain an open and dynamic UK financial market.

• Following the FCA’s publication of final rules for OFR funds (CP23/26) in July 2024, the roadmap also sets out the OFR implementation timeline.

The roadmap can be found here.

New City of London Corporation report - The UK: a top destination for financial and professional services investment

New figures published on 30 April show that the UK attracted over £1bn of financial and professional services foreign direct investment (FDI) in 2023.

Despite the challenging global macroeconomic environment, financial & professional services in the UK continue to draw international investors. The USA and Western Europe are the largest sources. The UK is a hotspot for global investment management: asset management was the sector securing the largest source of financial services investment, with 38% of all financial services Foreign Direct Investment (FDI) projects. The value rose to £277m, up 4% from the previous year.

As Europe's most popular destination for FDI, the UK attracted 222 FDI projects, with a combined value of £1.1bn. Across the past five years, London has continued to be the world's

number one global financial centre for FPS projects. With a total of 697 projects from 2019 to 2023, London is well ahead of competitors such as Singapore, Paris, New York City and Hong Kong.

New SUP 15 webform

Principle 11 requires a firm to deal with its regulators in an open and cooperative way and to disclose to the FCA appropriately anything relating to the firm of which the FCA would reasonably expect notice. It is important that these notifications are assessed within a short timeframe and escalated appropriately to the correct area for immediate attention, depending on the risks posed to the firm and/or consumer.

To improve the efficiency of this process, the FCA has created a new webform for notification form submission. Firms will be asked for more details of the issue before uploading their submission to allow the FCA to identify any high-risk concerns which may need prompt escalation.

Firms will be required to provide contact information of the individual submitting the notification alongside the following:

• Firm name and reference number

• Details of the approved person or appointed representative (if relevant)

• Whether the notification is a breach or for information only

• Category of issue (drop down options will be supplied)

• Summary of issue

This new webform can be found at here.

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PIMFA LEARNING AND EVENTS

PIMFA WEBINAR: TAKING THE STING OUT OF YOUR NEXT CASS AUDIT

Preparing and planning for your next CASS audit is a complex, costly and a timeconsuming process. There’s no magic bullet to solve this annual challenge, but measurable

Change is happening at all levels across our industry, governments are legislating for mandatory sustainability disclosures with ongoing assessments of their impact on businesses.

progress can be made to strengthen your framework and controls.

In this FREE 60-minute webinar we put three CASS experts under the spotlight to share their key strategies and approaches your firm can take in 2024 to ensure readiness for your next CASS audit.

Key discussion topics panellists debate include:

1. How your firm can complete a CASS audit in less time

2. Why CASS audit fees are rising and what you can do about it

3. The increasing role and importance of technology in your approach to CASS

4. What’s the upside of conducting a CASS health check

Our PIMFA ESG Roundtable aims to provide attendees with the latest information firms will require to ensure they are ready for what is coming, and the opportunities these changes will create for their clients and the sector.

Numbers will be restricted for this event, and attendees will have the opportunity to participate in a discussion on the below key themes with peers under Chatham House Rules:

• The Regulatory Risk of Greenwashing

• SDR & Investment Labels

• Implementation & Challenges

• ESG Data Challenges & Solutions

Discount available for PIMFA members.