Fortnightly bulletin 6th july 2017

6th July 2017 PIMFA BULLETIN is a fortnightly e-newsletter delivering a snapshot of the latest news and current affairs from within the industry and PIMFA*.

APFA and WMA merged to become PIMFA (the Personal Investment Management & Financial Advice Association) on 1st June. *

WHAT IS PIMFA WORKING ON? VAT and SIPPs PIMFA hosted a meeting between HMRC and several members to discuss a number of issues relating to VAT and SIPPs, including the disparity of VAT treatment between insured versus non-insured SIPPs, adviser charges, and HMRC Guidance in this area. Anyone interested in further details of the discussion can contact Andy Thompson.

Millennial Forum Members of PIMFA’s 2017 Millennial Forum presented the findings from their most recent research to a group of key industry insiders on June 26th.

The Millennial Forum research groups, which offer insight and thought leadership on four key topics affecting this key consumer group, is now in its second year after a successful launch in 2016.

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The four research groups, made of Millennials working in the Investment Management & Financial Advice industry, presented their findings to an audience of senior representatives from PIMFA firms and key stakeholders such as the media and government.

Supported by HM Treasury, the four working groups conducted primary research over the course of six months, and covering Millennials and the promotion of the industry, barriers to entry, generational fund flows and the impact of technology.

The initial findings were also discussed with an industry panel, which focused on how best to attract, engage and retain the millennial clients of the future. A full report will be published in the Autumn.

European Commission consultation on FinTech

The European Commission has concluded its consultation on the EU’s regulatory approach to the FinTech sector. It aims to ensure that technology leads to increased transparency in the market but does not receive preferential regulatory treatment.

PIMFA responded to the consultation setting out how FinTech will affect the financial advice and wealth management sector in the UK and what measures the EU could undertake to ensure technological advances will provide win-win solutions for firms and their customers.

Commission Vice-President Valdis Dombrovskis noted that amongst the regulatory responses under consideration is the introduction of an EU licensing and passporting framework for the FinTech sector. The Commission will now consider the responses before making an announcement on its next actions towards the end of the year.

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

As PIMFA's membership renewal period kicks off, we are keen to arrange meetings with legacy members across the country to address any doubts regarding what PIMFA is, what it does and who it represents.

We are particularly interested in talking 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, please email membership@pimfa.co.uk

Transaction Reporting and Corporate Actions On 28 June 2017 the PIMFA Transaction Reporting Working Party put together a draft list of corporate events that they believe will be subject to transaction reporting under MiFID II. This follows information received by FCA earlier in the month albeit at a relatively high level. ESMA Q&As are expected In September. In the meantime, PIMFA will finalise the list and send it to FCA for comment prior to publication in the MiFID II section of our website.

WHAT'S COMING UP IN PIMFA? FinTech Conference 2017 When: 6th September 2017, 09:00 - 18:00 Where: London Stock Exchange, 10 Paternoster Square London, EC4M 7LS CPD hrs: 5 Tickets: ÂŁ225 +VAT (Members), ÂŁ450 +VAT (Non Members)

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Following on from the enormous success of our inaugural Conference last year, we are delighted to announce our 2017 Fintech Conference.

Book Now The one-day event, held in conjunction with the London Stock Exchange (LSE), will provide attendees with a platform to discuss the advantages and potential risks of bringing technology and the Wealth Management industry closer together.

View the agenda here.

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: £349 +VAT (Members), £699 +VAT (Non Members) Keynote speaker announced: Lord Michael Dobbs Lord Michael Dobbs is best known as the best-selling author

Book Now

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? Advising on Pension Transfers On the 21st June, the FCA published a consultation paper on Advising on Pension Transfers (CP 17/16). The FCA is proposing to remove the guidance that advisers should start from the assumption that a defined benefit transfer would be ‘unsuitable’ for a client and replace it with a statement that retaining safeguarded benefits is ‘likely’ to be in a client’s best interests.

The FCA also intends to clarify the term ‘insistent client’ and will be launching a further consultation on this point in the coming months. In addition, the FCA is proposing to overhaul the current Transfer Value Analysis System (TVAS) for defined benefit transfers, and replace it with an overarching requirement to undertake appropriate analysis of the client’s options.

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Financial Guidance and Claims Bill On the 22nd June, the Financial Guidance and Claims Bill was introduced in Parliament. The Bill introduces a Single Financial Guidance Body and transfers regulation of Claims Management companies to the FCA. The FCA will respond formerly to the ‘Public financial guidance review: consultation on a single body’ in the summer.

The Bill also aims to strengthen the regulation of CMCs by transferring regulatory responsibility to the FCA. Additional powers are being introduced, allowing the FCA to cap the fees that claims management companies charge consumers, as well as ensuring a more robust authorisation process for new firms who wish to enter the market.

Brexit – Citizens’ rights The EU and UK have clarified their negotiation positions concerning the rights of EU citizens in the UK and of UK citizens in the EU ahead of the next negotiation round on 17th July.

The issue constitutes the initial priority of the UK government in talks and seeks to assure EU residents in the UK that they will be allowed to remain in the UK after it leaves the EU. The UK proposal received a mixed reception in Brussels with Merkel noting that it was a “good start” but not yet a breakthrough. Both parties will also discuss the financial settlement and Ireland’s soft border before the negotiations move on to the future relationship and transitional arrangements. The early negotiation rounds will likely set the tone for later Article 50 discussions on topics more directly related to the financial advice and wealth management sector.

Dormant Assets On 27th June 2017, PIMFA participated in a roundtable discussion hosted by Ernst & Young which was attended by a number of asset managers and 2 PIMFA member firms.

The Roundtable discussed the key issues to be flagged to the Government, including the need to differentiate between cash and other assets in any proposed expansion of the existing scheme. Further meetings are expected to take place.

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Dematerialisation of share certificates The Department for Business, Energy & Industrial Strategy (BEIS) has recently informed PIMFA and others involved on the Dematerialisation Steering Group (DSG) that work in the Government on the dematerialisation of share certificates has been paused until 2019. The Government still aims to implement the change in line with the timeline envisaged in the CSD Regulation, namely that all new transferable securities from 1 January 2023 to be in book-entry form and all existing transferable securities by 1 January 2025.

It is expected that work will continue within the DSG over the coming months.

CSD Regulation: Settlement Discipline Regime Working Party On 29 June 2017 the Bank of England chaired the latest CSD Regulation Settlement Discipline Regime Working Party. The Working Party has identified all the major risk areas of the proposed new buying-in and settlement discipline regime (expected to come into force towards the end of 2019).

Two areas in particular could impact PIMFA members: the mandatory buying-in regime on small cap and less liquid securities and the risk that market makers will no longer make markets in those securities; and the potential for abuse of the cash compensation regime and in particular that it could be used to enhance the returns of abusive short squeezes undermining market integrity. These are areas which will need to be closely monitored and, where possible, solutions identified.

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