Fortnightly bulletin 19th april 2017

WMA Bulletin 19th April 2017

Dear WMA member WMA Bulletin is a fortnightly snapshot delivering the latest news and current affairs from within the wealth management industry and WMA.

WHAT'S HAPPENING IN OUR INDUSTRY? Brexit – Council gears up for the negotiations After the triggering of Article 50, the European Union has officially started its preparations for negotiations with the first draft Council guidelines being circulated on 31st March. The first EU27 discussion of these draft guidelines has reportedly not resulted in major changes, mostly making small amendments and specifying the European Parliament’s role.

The final guidelines will be adopted on 29th April. The controversial Gibraltar issue has yet to be dealt with in any substantive way, and while the Spanish veto with regard to Gibraltar aspects has been noted in the media as no different from the right to veto that all member states have of any departure agreement with the UK, it does add an extra possible veto reason.

This demonstrates the sensitivity of any potential agreement to specific concerns, the difficulty of achieving one that satisfies all, and the likelihood of the UK having to engage in numerous bilateral discussions to achieve annexes or protocols that can be added to an overall framework. None of this will be easy or quick.

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Brexit – European Commission sets out phased schedule The European Commission (EC) is also preparing its work, although officially they have to wait for the guidelines before they can draft their negotiating directives. In a College of Commissioners meeting in late March, Chief Negotiator Michel Barnier set out that “attention [needs] to be paid to the financial services sector in order to minimise the impact of the UK’s withdrawal and not to jeopardise the programme of reforms introduced by the Union in this important area.”

But the Commission is likely to have a stronger, less political, grasp of this essential technical point than a number of Council members, some of whom are driven by other motives such as “punishing” the UK or picking up industry operations that can no longer stay in London, so it is a matter of conjecture as to how far they will persuade the Council of this view.

The EC expects negotiations to begin in June 2017, setting out a phased schedule as below; 

June – Autumn 2017: Principles of the orderly withdrawal agreement

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Late 2017 or early 2018: “Scoping” work on the UK’s future with the EU

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After the “scoping” work – until soft deadline of October 2018: Discussion of the transition agreement

Brexit – European Parliament resolution and logistics On 5th April the European Parliament (EP) passed its Brexit negotiation resolution jointly put forward by the EPP, S&D, ALDE and Green, with 516 in favour, 133 against and 50 abstentions. Although the resolution is not binding, the Parliament will expect the eventual negotiating mandate to reflect the concerns outlined therein.

The strong vote in favour, reflecting a united EP position, will make the resolution difficult to ignore. It sets out certain “red lines”, such as the protection of EU and UK citizens in each others’ jurisdictions, that, if crossed, may compel the Parliament to veto a proposed EU/UK agreement. So it provides boundaries to the Commission’s negotiating freedom.

The Parliament has also updated its own (informal) logistical set up around the negotiations; ALDE Group Leader Guy Verhofstadt (BE) remains the Coordinator; however he is now part of a steering committee consisting of Elmar Brok (DE, EPP), Danuta Hubner, (PL, EPP), Roberto Gulatieri, (IT, S&D), Gabriele Zimmer (DE, GUE) and Philippe Lamberts (BL, Greens).

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Global Cyber Alliance's DMARC Initiative - Guide & Webinar The Global Cyber Alliance (GCA) is an international, crosssector effort dedicated to confronting cyber risk and improving our connected world. The current partner base is up to 140 organisations and WMA has joined as a partner.

GCA have launched a free protocol, called DMARC, which offers an added layer of protection against phishing attacks.

You can read GCA's Setup Guide here which takes organisations through the DMARC implementation process. They are also holding a DMARC Webinar on 19th April which will cover the basics of DMARC and provide a brief overview of the GCA DMARC Setup Guide.

If this is is of interest to members they can register here.

Capital Markets Union Mid-Term Review Public Hearing On 11th April the European Commission (EC) hosted a public hearing to feed into the Capital Markets Union (CMU) mid-term review, following the consultation that closed on 17th March. Both Vice Presidents Dombrovskis and Katainen gave speeches, setting out the importance of the project.

The hearing itself comprised three panels covering promoting access to finance for SMEs, better investment opportunities for retail and institutional investors, and improving the functioning of the single market by removing barriers to cross-border flows of capital.

The retail debate focused on ongoing national barriers to cross-border retail business such as additional bureaucratic steps in many countries, the difficulty of identifying simple cross-border retail products, and the failure of intermediation in many jurisdictions (not the UK) to be good enough at explaining to retail clients the nature of markets and products so that trust in financial business is restored and savings can be converted into investments on a scale at least approaching that in the USA. The final mid-term review report is expected to be adopted by the European Commission on 7th June.

HMRC Fraud Hotline On 4th April 2017, HMRC launched the its Fraud Hotline, a new service which will simplify the fraud reporting process. The new telephone number and new online form will replace two separate tax evasion and customs hotlines. Details can be accessed here.

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Prospectus Regulation signed off and start on Technical Advice On Wednesday 5th April the European Parliament approved the final Prospectus Regulation text in a plenary vote, leaving only the Council to adopt it before it can be published in the Official Journal. Ahead of this, the European Commission has already mandated ESMA to begin its work on the Technical Advice for the Delegated Acts.

The deadline for ESMA to deliver the Technical Advice is December 2017. The Commission will then aim to adopt the delegated acts by October 2018 with the rules coming into force in June 2019, after the prospective departure of the UK from the EU but in time for UK law to have incorporated the Regulation’s requirements. It is one of the last pieces of EU legislation that will become part of the UK acquis before Brexit.

WHAT'S WMA WORKING ON? Legal Entity Identifiers The LSE has recently clarified that where an Investment Firm is obtaining an LEI on behalf of its Legal Entity clients, the authority from the Legal Entity will generally not be acceptable by email unless it is from a company e-mail domain with the company details and title on official email signature. This would not therefore be possible for trusts. The LSE has produced a template letter which is available on request from enquiries@thewma.co.uk.

The WMA LEI Guide has been updated accordingly.

FCA Roundtable on MiFID II The WMA attended FCA’s regular roundtable on MIFID II on 6th April. Most of the issues addressed at the meeting were for wholesale firms rather than our sector. Minutes will be published on FCA’s website in due course.

FSCS Levy WMA met with the Financial Services Compensation Scheme (FSCS) on 12th April to get an update on the level of claims and levy outlook.

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WMA Transaction Reporting Working Group and WMA Post-Trade Transparency Working Group WMA has recently hosted member meetings in respect of Transaction Reporting (5th April 2017) and Post-Trade Transparency (12th April 2017) as part of our ongoing MiFID II Project.

More information will be provided in the next WMA Update.

Latest New Member WMA would like to welcome it's latest new member:

Saranac Partners

WHAT'S COMING UP IN WMA? WMA Compliance Conference 29th June 2017 

Herbert Smith Freehills, London

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09:00 to 16:30 - 4.5 hrs of CPD

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Tickets: £225 + VAT (Members), £450 + VAT (Non Members)

This full day conference will bring together a high-level audience to engage with the leading industry experts and discuss key issues shaping the compliance in the investment management and financial advice world.

Speakers will include FCA and FOS and delegates will hear updates on MiFID, PRIIPs, SMR and other hot topics.

Book Now

View the full agenda here.

Edinburgh CPD Seminar: MSCI WMA Private Investor Indices – 25.04.2017 MSCI will provide an update on the new MSCI WMA Private Investor Index Series. They will explain the underlying components of the indices, provide an update on the recent enhancements and answer any questions from member firms.

Book your place here

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WMA Regional Briefings Series April 2017 WMA Briefings are a series of country-wide events designed to keep members updated on Regulatory, Business and Operational issues in the UK and EU. Book your place here: Newcastle – 24.04.17 Edinburgh – 25.04.17 Glasgow – 25.04.17 Norwich – 26.04.17

WMA GDPR Conference 2017 In light of the new GDPR regulations coming into force in May 2018, the WMA is hosting a full-day workshop to help firms meet their data protection obligations.

This conference will be a deep dive one-day event that will specifically focus on the likely impact GDPR will have on business critical processes and provide a framework to keep your organization GDPR compliant. To find out more and secure your place, book now.

CPD Seminar: MiFID II & Fees Morningstar will share their latest interpretations of the evolving costs and charges disclosure requirements. They will provide an update on the anticipated data fields, formats, sources and frequencies, together with a look at the overlapping PRIIPs requirements. The session will also include a look at how these inputs can be used in a fee calculator application.

For more MiFID information click here.

To book to attend this event register here.

New Sponsorship & Hosting Opportunities for 2017/2018 The WMA has just released its 2017/2018 Sponsorship Programme, offering a comprehensive listing of its events, and providing an early bird opportunity for members to lock-in Lead Sponsorships for hosting any of our sell-out events such as our Financial Crime Conference. To find out more about these events and how your firm can get involved, please email Cheryl Chickowski.

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