Fortnightly bulletin 21st june 2017

21st June 2017

PIMFA Bulletin is a fortnightly e-newsletter delivering a snapshot of the latest news and current affairs from within the industry and PIMFA*. Download the PDF version here. *APFA and WMA merged to become PIMFA (the Personal Investment Management & Financial Advice Association) on 1st June.

WHAT IS PIMFA WORKING ON? Member Visits following APFA & WMA Merger As members know, APFA and WMA recently merged to create the Personal Investment Management & Financial Advice Association (PIMFA) - you can read the read the full press release here.

As PIMFA's membership renewal period kicks off, we are offering to visit members around the country to address any doubts from former APFA and WMA members about what PIMFA is, who it represents and what it does.

We are very keen to talk to members about the key issues and challenges they face during the coming year so that it informs our future strategy.

Several members have already held meetings with PIMFA's Richard Adler and Jonathan Read and have told us they found it a useful dialogue regarding the future and how they will be looked after.

If you wish to request a meeting anywhere in the UK, please email membership@pimfa.co.uk

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FinTech Conference The Dragon’s Den has met again to decide the shortlist of start-ups and fintech companies that will appear at our Fintech conference on 6th September.

The panel consisted of experts from member firms, and sifted through several very interesting and useful business propositions and firms that PIMFA members will want to hear about.

Members can book their place at the conference below

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Best Execution PIMFA met with the FCA to discuss their findings, specifically in the context of PIMFA firms, from their follow up work in respect of TR 14/13 .

July’s edition of Update will cover this in further detail.

Capital Requirements We recently attended our regular update meeting with FCA on the new capital requirements regime for CRD investment firms, and will be attending the open hearing at EBA on 3rd July.

Article 38(5) of the CSD Regulation Over recent weeks, PIMFA has met separately with Euroclear UK & Ireland (EUI) and the FCA to discuss our draft Q&A on Article 38(5) of the CSD Regulation (CSDR) – the requirement for CSD Participants to offer their clients the choice between segregated and omnibus accounts. The Q&A has also been discussed with PIMFA's Retail Markets Committee and PIMFA's Operations Committee.

EUI is planning to issue a consultation paper on the CSDR in July 2017 and PIMFA will update the draft Q&A in the light of that consultation paper, making it available to PIMFA members in final form soon after that.

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PIMFA Women in Wealth Forum PIMFA's latest Women in Wealth Forum in early June focused on Diversity. The importance of targeting women in the lives of clients as well as female clients themselves was highlighted, given that sometimes financial decisions are hard to secure because of the marketing of firms. We heard from three panellists: James Clarry from Coutts; Gill Notts from EY and Shona Bajal from UBS who talked about a range of issues including approaches to getting female clients and addressing culture to keep both men and women within the sector.

FinTech Consultation PIMFA responded last week to the Commission’s consultation on Fintech, covering a wide-ranging crosssection of issues including artificial intelligence, big data, crowd-funding, DLT and other innovative techniques.

Following an informal nudge from a Commission official at a round table in Brussels to their renewed interes on the regulatory aspects of Fintech, we focused on some of these issues. Notably, we stressed the need for regulation to remain proportionate in the face of fast-advancing and developing technologies (e.g. A.I. and Open Source), technology-neutral solutions, and the use of regulatory sandboxes, and other mechanisms such as referrals, to test and encourage innovative solutions.

Read our response here.

WHAT'S COMING UP IN PIMFA? 3 PIMFA Compliance Conference

When: 29th June 2017, 09:00 to 16:30 Where: Herbert Smith Freehills, London CPD hrs: 4.5 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 II, PRIIPs, SMR and other hot topics.

View the full agenda here.

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PIMFA Annual Summit When: 8th November 2017, 09:00 - 20:00 Where: The Grange Hotel Tower Bridge, 45 Prescot Street, London E1 8GP CPD hrs: 6 Tickets: ÂŁ349 +VAT (Members), ÂŁ699 +VAT (Non Members) Keynote speaker announced: Lord Michael Dobbs Lord Michael Dobbs is best known as the best-selling author

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of House of Cards which has been successfully adapted for TV in both the UK and US; the latter still running on Netflix, featuring Kevin Spacey.

To find out more or book now to reserve your place.

WHAT'S HAPPENING IN OUR INDUSTRY? FOS Annual Review On the 13th June, the Financial Ombudsman Service published its Annual Review for the 2016/17 financial year.

This report provides an overview of the type of complaints handled by FOS over the last year. Advisers accounted for 0.5% of the total 321,283 new complaints received by FOS in that time, though the number of SIPP and SASS complaints increased by 34%. There was also a 15% rise in complaints about pensions and an 8% increase4in complaints about income drawdown. FOS received 161 complaints about advisers related to events taking place more than 15 years ago.

Mid-Term Review of the Capital Markets Union The European Commission published the Mid-term Review of the Capital Markets Union (CMU) on 8th June, setting out an ambitious financial services legislative programme for the next two years.

The Review specifies the remaining legislative steps necessary to complete an integrated capital market in the EU by 2019 and stresses its commitment to the project in the context of the UK’s withdrawal from the EU. Notable amongst the many proposals announced with the Mid-term Review are amendments to the European supervisory system, in particular the strengthening of ESMA’s powers and the granting of direct supervision under certain conditions. The Commission has further announced proposals on the prudential review of investment firms, on the facilitation of the cross-border distribution and supervision of UCITS and AIFs, on a study on distribution systems of retail investment products across the EU, and on further development of Fintech.

Brexit – First day of negotiations The EU and UK concluded the first round of talks on 19th June coming to an agreement on the structure and priorities of the Article 50 negotiations. The UK accepted the EU’s proposed sequencing of talks, with future trade relations only coming onto the agenda once EU Member States are satisfied with progress on the UK’s terms of withdrawal.

The topics of citizens’ rights, financial settlement and other separation issues will be discussed in separate working groups, while the Irish question will be dealt with in a dialogue between the deputy negotiators Sabine Weyand and Oliver Robbins. Both sides will come together every three to five weeks for negotiations, with the next round of talks scheduled for the week of 17th July. Theresa May is expected to present her government’s position on citizens’ rights at a Council Summit on 22nd June, with EU27 leaders discussing the progress of negotiations separately.

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Brexit - UK General Election The Conservative Party emerged from the UK general election with the largest share of seats but no majority, yielding a minority government reliant on support from the Democratic Unionists (DUP).

Theresa May’s promise to begin Article 50 negotiations in the week of 19th June has been met, but the government’s weakness throws the UK objectives into question, as revealed clearly by the alternative views now gaining traction and the increasingly strong role of those such as Philip Hammond who wish to put ‘softer’ options to the fore. This may in the event be good for business if it results in better market access than would otherwise have been the case, more emphasis on the jobs and growth impact of Brexit and less on immigration control, and perhaps even a settlement on people that facilitates continuing access to large pools of skilled labour from outside the UK. But the uncertainty surrounding government continuity for any length of time risks the possibility of a further general election which could jeopardise the very tight timeframe for agreement.

FinTech Week returns for the 4th year Fintech Week London is a series of conferences, exhibitions, workshops, hackathons and meetups.

Expect 600-1,000 delegates per day from over 50 countries and 3,000 – 5,000 participants throughout the week.

FinTech Week's aim is to unite the world of Fintech in the world’s financial capital to enhance the dialog between established multi-nationals, innovation firms, disruptive startPIMFA Members

ups, governments and investors.

Discount: Enter PIMFA30 to get 30% off

Find out more at: www.fintechweek.com

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Review of EMIR

The European Commission has continued its work on this dossier, by proposing last week further refinements to the supervisory framework for CCPs, and particularly “systemically important” ones from Third Countries. It is this issue – that of the location of euro clearing – that has grabbed the headlines in recent days. While this is an important aspect, less well commented upon are the increased powers being proposed for the EU authority, ESMA, notably in the areas of enhanced

supervision (by an enlarged college), adjucation of equivalence, information, on-site inspection, and sanctioning powers. The proposal stops short of mandating compulsory relocation of euro-clearing; instead, ESMA has the responsibility of assessing whether systemically-important CCPs meet the enhanced requirements. If they do not, ESMA can petition the Commission to produce an implementing act to force the CCP’s re-incorporation in the EU. While not many PIMFA members are direct clearing members, and so affected, we suggest this is an issue worth watching, because of potential knock-on effects in other areas of EU legislation.

FATCA Registration: Renewal of Agreements with the IRS The US Internal Revenue Service (IRS) has updated its FATCA FFI Registration System to allow Foreign Financial Institutions (FFIs) to renew their FFI Agreements. However Reporting Model 1 FFIs that are not operating branches outside of Model 1 jurisdictions – this will include PIMFA member firms who originally registered for a Global Intermediary Identification Number (GIIN) with the IRS – are not required to renew as they have not made an agreement with the IRS. All financial institutions that registered for a GIIN should receive an email from the IRS notifying them about a message in their inbox. FIs which do not have to renew then click “No”, which completes the process.

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