PIMFA Bulletin 11th January 2018

11th January 2018

Dear Members 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? New PIMFA Member Firms We are delighted to welcome the following member firms to PIMFA:

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DB UK Bank Ltd

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Crowe Horwath GRC LLP

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Spitch UK Ltd

FSCS On the 4th January 2018 PIMFA held a conference call with FSCS following the release of its most recent Outlook communication.

The discussion covered the proposed changes to how the FSCS Levy is determined and how its accounting period would be changed to align with the financial year. More detail is set out in

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FCA CP 18/1 and clarify the expectation there would be a nine month year for the period from July 2018 to March 2019, following which it will align with the financial year going forward. The FCA requested final comments on its CP by 5 February 2018.

FSCS confirmed it is in contact with parties affected by over and under payments relating to Arch Cru redress and that is was an ongoing process.

FSCS confirmed it would need to raise additional funding of £24million from the retail pool, but it would also be returning £20million to the general pool.

PIMFA asked if FSCS could clarify when the bills for the required extra funding will be issued to member firms and FSCS will respond with an update on when that process is expected to begin.

Insurance Distribution Directive (IDD) Update On the 20th December 2017, the European Commission announced its proposal to postpone the application of the Insurance Distribution Directive (IDD) and the accompanying Delegated Regulations to 1st October 2018. EU countries are still required to transpose the IDD into national law by the 23rd February, but regulated firms have until the 1st October to comply. The proposed postponement requires the agreement of the European Parliament and Council but this is expected to be agreed imminently.

The FCA has now published its second policy statement on IDD implementation (PS17/27), responding to feedback received in relation to CP17/23. This policy statement contains near-final rules on conduct of business requirements, disclosure requirements, suitability and appropriateness, professional requirements and the IPID. There are still various issues to consider, including those in relation to product governance, inducements and conflicts of interest and these will be covered in a third policy statement which is expected to be published in January.

Recent PIMFA Consultation Responses View the recent PIMFA public affairs responses below: 

PIMFA response to CP17.33 Insurance Distribution Directive Implementation part 3

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PIMFA Response to FCA CP17.21 Premium Listing for SCCS

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PIMFA response - EBA consultation on Fintech

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PIMFA response - MAC call for evidence EEA workers

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PIMFA response HoL EU select committee deal or no deal inquiry

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PIMFA response to CP 17 25 - extending the SM&CR to all FCA firms

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PIMFA Response to Work and Pensions Select Committee Inquiry on Pension Freedoms

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PIMFA response to CP17 23 - Insurance Distribution Directive Implementation part 2

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PIMFA consultation to CP 17 29 client money and unbreakable deposits

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PIMFA response HoL Constitution Committee - EU Bill inquiry

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PIMFA Response to ICO Consultation - Controller Processor Contracts Guidance

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PIMFA response to ESMA consultation suitability guideline

Read all the PIMFA Consultation Responses here.

If members would like to give their feedback or input to any consultation papers please email us at enquiries@pimfa.co.uk.

MiFID II - Member Only Information Following the MIFID II deadline members are reminded that they can access a wealth of information on the MIFID II section of the PIMFA website which includes: 

MiFID II Project 'Bible'

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PIMFA MiFID II for Financial Advisers Guide

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MiFID II / MiFIR Source Material

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Transaction Reporting

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*Please note all of this material is for PIMFA members only and therefore password protected.

If you don't have your login details please email us at enquiries@pimfa.co.uk and we will set you up.

MiFID II Transaction Reporting – raising queries with the FCA FCA has confirmed that firms wishing to raise MiFID II Transaction Reporting queries should use their helpline – (0) 207 066 6040 or email them at mrt@fca.org.uk.

MiFID II Transaction Reporting – Member Feedback PIMFA have asked the FCA to give us early warning of any common problems, misunderstandings or mistakes they encounter in the first weeks of Transaction Reporting under MiFID II and they have asked us to reciprocate.

In the event that you encounter any issues with the new Transaction Reporting regime, would you please pass the details to Kevin Sloane so that he can share them with other PIMFA members.

Senior Managers and Certification Regime (SMCR) The FCA published in December a consultation paper (CP 17/40) on the transition to the SMCR along with a CP on the duty of responsibility (CP 17/42). These papers complement CP 17/25 on the extension of SMCR to all FCA firms to which PIMFA submitted a response which can be read here. The commencement of the regime for solo regulated firms is expected to come into effect in mid-to-late 2019.

The deadline for comments is 21 February and PIMFA will hold a meeting with its SMCR working party in late January.

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WHAT'S COMING UP IN PIMFA? PIMFA Financial Crime Conference When: 25th January 2018, 09:00 to 18:00 Where: SEI, 1st Floor, Alphabeta, 14-18 Finsbury Square, London EC2A 1BR CPD hrs: 4.5 Tickets: £249 + VAT (Members), £499 + VAT (Non Members) As the financial crime landscape evolves with new techniques and technologies, the growing threat to firms and their clients is undeniable.

Book Now

In response, regulators are pushing back by implementing stricter controls. Firms need to know how to protect themselves and

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their clients and what can be done to alleviate the risk of financial crime.

Join us at the PIMFA 2018 Financial Crime Conference and access leading industry debate from professionals across the regulatory, law enforcement and cyber security space.

Women in Wealth Networking Drinks When: 8th March 2018, 18:30 - 21:00 Where: RBS, 11th Floor, 280 Bishopsgate, London EC2M 4RB Tickets: Free for PIMFA members

The Women in Wealth event series has been designed to provide a platform for candid discussion amongst professionals within the world of wealth.

Book Now This event will provide access to the UK’s top professionals in the investment management and financial advice industry, to meet people who can contribute to your success and be inspired and motivated to drive your career forward.

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WHAT'S HAPPENING IN OUR INDUSTRY?

Women in Finance Awards Nominate a stand-out achiever in financial services today The Women in Finance Awards returns to the Royal Lancaster London Hotel on 27th June 2018.

After the huge success of this year's awards, with over 500 of the UK's top finance professionals gathering to celebrate leadership in diversity and inclusion, you won't want to miss next year's event.

Of all the industries in which women are poorly represented at a senior level, finance and financial services have the biggest challenge to address.

With this in mind, PIMFA have teamed up with Vitesse Media and their partners - Savvywoman, Innovate Finance, Voice at the Table, Women's Enterprise Scotland, UK Business Angels Association and other leading advocates for gender parity in the sector to celebrate a new tranche of leaders and rising stars in financial services. Advocates for women in finance are also welcome to apply, regardless of gender.

Nominating for the Women in Finance Awards is free, and easy to do. Simply refer to the category and criteria most relevant to yourself, a colleague or friend in financial services, and submit a 400 to 800-word written nomination.

Hurry! Nominations close on the 26th January, so get involved today.

Nominate Here

ESMA statement and FCA response on LEI implementation under MiFID II Members will have seen the ESMA statement and subsequent response from FCA on the temporary measures introduced in respect of Legal Entity Identifiers (LEIs).

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The ESMA statement advised that these temporary measures will last for six months from 3/1/18. They allow investment firms to provide a service triggering the obligation to submit a transaction report for which they had not previously obtained an LEI code, as long as before providing the service, the firm obtains the necessary documentation from the client to apply for the LEI on their behalf.

The FCA’s response pointed out that in order to accommodate this change, their Market Data Processor (MDP) system would require changes which would not be complete by 3/1/18. The FCA will advise on the date when they intend to make the MDP changes, but until then firms should not seek to submit reports that would not normally pass that validation. PIMFA will contact members as soon as any update is received from the FCA.

MiFID II As MiFID II/MiFIR came into force on 3 January, Regulators provided extensions in certain cases: firms yet to obtain legal entity identifiers (LEIs) were allowed a further six months; ICE, LME and Eurex got a further 30 months to comply with specific requirements.

Trading levels at Europe’s largest exchanges were lower than usual, with liquidity subdued while market participants adjust to the new requirements. But there have been no major disruptions; ESMA chairman Steven Maijoor remarked that “what we can see, for our part, is no glitches so far”. The legislation has been fully transposed on time in only 11 EU member states, although investors can still use markets in the other 17 countries.

Benchmarks Regulation The Benchmarks Regulation came into force on 3 January, regulating benchmarks in the EU for the first time. It aims to ensure the accuracy and integrity of financial benchmarks by imposing new requirements on administrators and contributors that improve governance, input data quality, and transparency. It requires market participants in the EU only to use benchmarks registered with national competent authorities (NCAs). Administrators of third country benchmarks will have until 2020 to comply with the new regulation.

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PRIIPS Regulation The PRIIPs Regulation came into force on 3 January. There remains confusion at the margin about which products are covered and concern about whether numerical information required in the KID is calculated on a basis that serves the interests of retail consumers.

In some quarters it is felt that the KID has become the opposite of what was initially intended and is not at all a simple document offering concise and understandable information to consumers which they can use to compare PRIIPs with other products. There will now be an implementation period during which it will be important for firms to gather information about the value of the KID that can be used in downstream discussions with the regulator about sensible and worthwhile future reform.

Brexit – Article 50 Negotiations EU27 leaders approved “sufficient progress” at the European Council Summit in December, thus opening the second phase of negotiations. Talks will continue about subjects already under discussion (financial settlement, citizens’ rights, Irish border) but will also cover all withdrawal issues.

The EU will aim to finalise its negotiating mandates for transition and for exploratory talks on the future relationship and to this end the Commission will hold sector-specific seminars from January 2018 onwards with EU27 representatives. If the negotiating directives on transition are adopted by the end of January, agreement could be achieved by the Council Summit on 23 March on this and the future relationship guidelines.

Latest Industry Events View the latest Industry Events on our website here.

If your firm has an event that you would like to post on this area please let us know here.

PIMFA, 22 City Road, Finsbury Square, London ECIY 2AJ www.pimfa.co.uk (+ 44) 20 7448 7100 Preferences | Unsubscribe

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