PIMFA Weekly News Bulletin - 9 November 2020 by PIMFA

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PIMFA WEEKLY NEWS BULLETIN | 9 November 2020

Dear << Test First Name >>, Welcome to the PIMFA Bulletin, grab a coffee and take 10 minutes to read this week's latest industry news affecting you and your firm.

LATEST NEWS

Brexit Negotiations

Share Trading Obligation post Brexit

After two weeks of intensive negotiations,

In a statement issued this week, the FCA

the UK and EU agree that significant

said that mutual equivalence between the

divergences remain. David Frost, UK

UK and EU is easy to agree and remains

Chief Negotiator, said there are “wide

the best way of dealing with overlapping

gaps on core issues” although “some

STOs. The FCA said it will allow UK firms

progress” has been made. His EU

to trade UK shares on EU markets even

counterpart, Michel Barnier, is reported to

without an equivalence decision. This

have been frustrated with a lack of

approach is driven by the objective to

progress and engagement from the UK.

preserve the ability of UK-based firms to

He acknowledged that progress was

execute their share trades at the venues

made on police and judicial cooperation,

where they can get the best outcomes for

but said there was no movement on

themselves and their customers. The FCA

fisheries, level playing field and

will use the Temporary Transitional Power

governance arrangements.

to allow firms to continue trading all shares on EU trading venues and

Following a short break this week, the

systematic internalisers (SIs) where they

negotiations will resume on 6 November

choose to do so, and where the regulatory

at deputy level and the two Chief

status of those venues and SIs permits

Negotiators will continue the talks from 8

such activity.

November in London. The FCA’s approach is intended to ensure open markets and competition between Brexit and PIMFA Members' Preparedness

trading venues globally and supports companies’ freedom to choose where to raise capital, regardless of the currency they are seeking to issue in.

The UK is due to exit the EU Single Market when the Brexit transition period

Latest PIMFA

ends on 31 December 2020. The

Consultation Response

negotiations on the terms of the future relationship between the UK and EU are ongoing but, regardless of the outcome,

PIMFA’s latest consultation response is

firms with an EU footprint will need to

to the FCA on the Liquidity Mismatch in

adjust to operating from a third country in

Authorised Open-ended Property

relation to the EU. Retail financial services

Funds

firms cannot rely on a pan-European set

of rules for servicing customers in the EU

Read this and all of our other PIMFA

and, with passporting lost and no

consultation papers here.

equivalence available in the retail investment sector, the options for PIMFA

PIMFA in the Press

firms to continue cross-border trade with the EU are limited and mostly dependent on the approaches adopted by national

FT Adviser: Regulators in the WPC's

regulators in the EU Member States. The

sights over scams

FCA advises firms in the retail financial

Professional Adviser: FCA chief: No

services sector, who wish to continue to

immediate plans to reduce FSCS levy for

serve clients in the EU, to speak to local

advisers

regulators and ensure they understand

Adviser Points of View: PIMFA calls for

that regulatorâ&#x20AC;&#x2122;s approach and the impact it

the approval of unregulated financial

will have on their business post Brexit

promotions to be a regulated activity

transition.

We want to hear from firms who would like

Request for Vulnerable Customer case studies

to obtain legal advice on options available to them for servicing clients in the EU once the UK has left the Brexit transition period. The cost of such advice

We would like to collect case studies

would be shared among firms participating

relating to vulnerable customer issues

in the project. At this stage, we would be

from member firms, so that we can collate

grateful if you could indicate your interest

them and create a list of common issues

by emailing Maja Erceg.

and possible solutions. The case studies would be anonymised and filed together to provide a useful source for members in devising their policy and processes in relation to vulnerable customers.

Please send any case studies or scenarios to Alex Roberts.

ESG & Climate Change

The European Banking Authority (EBA) has recommended that supervisory review processes are ‘enhanced’ with “ESG factors”, and a “new area of supervisory analysis and evaluation” looking at long-term resilience across financial institutions’ business models.

The EBA made its proposal in a discussion paper this week where it outlines its thinking on how ESG factors and risks could be included in the regulatory and supervisory framework. It noted existing supervisory review processes might not be robust enough to understand longer-term impacts from ESG risks on future financial positions and related long-term vulnerabilities.

Earlier this year, in reply to the EU’s Renewed Sustainable Finance Strategy consultation, the EBA pointed out there is a “critical mass of green assets to make green securitisation possible”, especially in Europe, and echoed a recent report by the European Central Bank that close to a third of surveyed European banks have not considered whether their capital is vulnerable to financial losses resulting from climate change.

The consultation will also support the EBA’s other sustainable finance work, such as developing a technical standard on ESG risks disclosure requirements, and is interesting as it is an example of EU regulatory authorities working together to be more consistent on ESG issues. This could be a path the UK regulators also take in the coming years.

Latest PIMFA Blogs & Press Releases

Senior Wealth management and financial advice figures gather for PIMFA's virtual leadership summit PIMFA calls for the approval of unregulated financial promotions to be a regulated activity PIMFA welcomes first reading of Financial Services Bill Rising Professional Indemnity Insurance premiums present advice industry with an existential threat PIMFA urges Regulator to work more closely with industry to rebuild levels of trust in fair FSCS outcomes

EVENTS & LEARNING

PIMFA Online Learning Authentic Leadership: How to thrive as a female leader in wealth and finance 24 November Early Bird Fee: £2,500 member | £3,000 non-members

Break through the barriers and get what you want from your career. This six month programme is for any woman seeking to reach her true leadership potential and for anyone — man or woman — looking to create a more gender-balanced workforce. Find out more about this ground breaking programme here.

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 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 • and others A 50% early-bird discount is available to all PIMFA members if you book by October 31st 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.

The PIMFA ESG Academy, supported by Morningstar, is definitely NOT your traditional online class! As you learn at your own pace and in your own time, you will have access to an evergreen library of ESG content that you can engage and interact with on your tablet, computer and mobile – all FREE for PIMFA members! The Academy was launched following growing demands by advisers for an immersive, engaging, CPD-approved learning experience that supports them in making the most of the growing ESG opportunity - find out more here.

Partner Event - Morningstar Investment Conference 16-17 November

The all-digital Morningstar Investment Conference (16-17 November) offers a unique opportunity to watch the great content on the UK agenda, from wherever you are. Register for free today

There will be a big focus on ESG, including Holly Mackay’s ‘Seven Sustainable Investor Tribes’ and founder of Sustainalytics, a Morningstar company, Michael Jantzi, who will talk about why ‘now’ is the time for sustainable investing. We’ll also feature sessions from the likes of Carl Richards, creator of The Behavior Gap, and Morningstar's Mike Coop, Head of Multi Asset Portfolios, looking at new strategies that advisers can adopt to help investors win.

Plus, registering for the UK edition of the Morningstar Investment Conference gives attendees on demand access to ALL of Morningstar's conferences from around

the world via the same event platform until 1 December.

WHAT'S HAPPENING IN OUR INDUSTRY

Bank of England

At a meeting held on 4 November 2020, the Bank of Englandâ&#x20AC;&#x2122;s Monetary Policy Committee voted to maintain Bank Rate at 0.1% and added ÂŁ150 billion to its bond purchase target to support the economy through a second lockdown. The BoE also forecast a 2% contraction in the economy for the final three months of the year, reversing its projection in August of 5.5% growth, because of the new government restrictions and a rise in the spread of the coronavirus. The Bank of England also said that the outlook for the economy remains unusually uncertain and depends on the evolution of the pandemic and measures taken to protect public health, as well as the nature of, and transition to, the new trading arrangements between the EU and the UK.

FCA sets out its approach to the share trading obligation

The FCA has confirmed its approach to the share trading obligation (STO) at the end of the Brexit transition period, if mutual equivalence is not agreed. Only mutual equivalence would mean that firms could continue to satisfy STO obligations at trading venues in both the EEA and the UK.

The FCA will use the Temporary Transitional Power (TTP) to avoid disruption and allow firms to continue trading all shares on EU trading venues and systematic internalisers (SIs).

This use of the TTP means that UK market participants will continue to be able to access any EU trading venue from the end of the implementation period, providing the venue has ensured it has the relevant regulatory permissions.