Regulatory Update Round

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 2 Learning Outcomes To understand the regulatory implications of using social media To understand the implications of the finalised guidance paper on inducements and conflicts of interest To understand the impact of the regulation of consumer credit To understand the regulatory implications of auto enrolment Guidance on moving to clean share classes

Use of Social Media in a Regulated Environment

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 4 Social Media Is Social Media a Financial Promotion? Financial Promotion:- “a communication that is an invitation or an inducement to engage in investment activity” All promotions exempt if it contains only; Name of firm Logo Contact point Reference to regulated activities of firm and/or fees Principle 7 – Communications with clients – “Clear, fair and not misleading” – Applies to all

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 5 Social Media All Financial Promotions must be approved by firm’s compliance officer except where there is interactive dialogue Considerations; Is this channel suitable for the type of promotion? Provide balanced and sufficient information Can risk information be clearly and prominently displayed? No requirement to include Regulatory statement Social media policy/Access rights Don’t give advice!

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 6 Social Media FCA to publish further guidance later this year

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 7 FG14/1 – Inducements and Conflicts of Interest

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 8 Inducements and Conflicts of Interest Providers should compete on price and quality to secure distribution Rules only permit payments that are designed to enhance the service to clients Any payments must be proportionate to overall cost Principle 8 – a firm must manage conflicts of interest fairly These must be disclosed to clients

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 9 Inducements and Conflicts of Interest Certain items do not require disclosure. These include:- Gifts and Hospitality of a “reasonable value” Training Use of software systems Freepost envelopes

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 10 Inducements and Conflicts of Interest SimplyBiz support:- Conflicts of Interest Policy

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 11 Inducements and Conflicts of Interest Managing Conflicts of Interest review papers

Regulation of Consumer Credit

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 13 Regulation of Consumer Credit Do you need to be Authorised? Category A Required where a firm lends money, offers credit or gives people time to pay for goods and services Allowing client to spread cost of initial adviser charge;- over 4 or more payments over a period of more than 12 months

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 14 Regulation of Consumer Credit Do you need to be Authorised? Category C Required for introducing clients to sources of credit, including a recommendation to deal with a particular Lender:- Buy to Let Second Charge

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 15 Regulation of Consumer Credit Do you need to be Authorised? Category E Advising clients about how to discharge specific debts on a commercial basis Advice to repay credit/debts as part of overall financial planning before investing

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 16 Regulation of Consumer Credit New rules covering:- Approved Persons Reporting Supervision New Specialist Sourcebook (CONC) Pre-Disclosure Commission disclosure General Conduct Financial promotions

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 17 Regulation of Consumer Credit What next? Apply for Interim Permissions prior to 1 st April 2014 Applications for full authorisation expected to commence Autumn 2014 Policy Statement with final rules expected February 2014

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 18 Auto Enrolment - Regulatory Aspects

Arranging the Scheme This usually involves; Factfinding the employer Agreeing the fee Reviewing existing arrangements Establishing a new scheme Selecting a default fund option

Employer Services Initial steps are carried out directly with the employer These are not FCA regulated activities, therefore:- No qualifications required No authorisation needed

Next Steps Invitation to employees. Either; Employer can invite or Adviser Firm can invite

Employer Invites Employer invites directly Administrated by adviser firm under the title of the employer non-regulated activity

Adviser Firm Invites Is this an invitation to join a Retail Investment Product? If scheme is written under a Master Trust Not FCA regulated If it is a product providers scheme FCA regulated - Requires a direct offer letter and disclosures. Use SB templates

Contact with Employees Individual contact could include; Employee requesting advice Group Presentations Individual Clinics Transfers Ongoing Support ADVICE?

Case Study Meet and greet Information about the employer Agree a fee for services No disclosure documents or Fact Find required Company Information No of Staff Eligible Jobholders Entitled Workers Existing Arrangement...Yes Salary Ex or from pay.....SE Etc

Review existing arrangements Establish scheme and provider Select default fund No recommendation or suitability report required

Group presentation Leave or send out joining packs in name of employer This is not a regulated service This is then be followed by clinics

Case Study - Individual Meetings Questions that may arise; Should I enrol? Am I contributing sufficiently for retirement? What should I do with my existing plan? Which fund should I invest in? This is regulated advice

Case Study – Individual Advice Delivering advice in relation to the AE scheme; Provide a suitable disclosure document Complete a shortened factfind (GPP) Assess the employees attitude to risk Deliver appropriate advice Document in a suitability report

Rebates to Platforms and Clean Share Classes

Background June 2007 Consultation on Platform Review – June 2012 Policy Statement PS13/1 Explicit charge for using a Platform Banned rebates from fund managers Effective from 6 th April 2014

Effects of the Policy Statement The client will pay an explicit cost for using the Platform service AMCs will reduce – Clean share classes Trail / Legacy will be lost Communications to clients/customers will be required

Questions This raises a number of queries; Can conversions be carried out en-mass? Is express consent required? Is advice needed / required? What is the role of the adviser? What documentation will be required?

Outcomes (Platform) Providers As nominee/unitholder they can convert to new share class They will be ‘encouraged’ to inform customers and engage with adviser firms Consider any commercial relationships between beneficial owner and adviser firm Direct unit-holders will have to provide express consent to convert

Outcomes Adviser Firms Monitor actions from (Platform) Providers Contact active clients? Provide information / advice? Advice can be on conversion only Consider loss to legacy / trail commission

SimplyBiz Support Review C&T Times - Nov 13 Adapt our template approach letter Include the abbreviated CAL to secure ongoing income

SimplyBiz Services plc, The John Smith's Stadium, Stadium Way, Huddersfield, West Yorkshire HD1 6PG. Registered in England under Company No Slide 37 Learning Outcomes To understand the regulatory implications of using social media To understand the impact of the regulation of consumer credit To understand the regulatory implications of auto enrolment To understand the implications of the finalised guidance paper on inducements and conflicts of interest Guidance on moving to clean share classes

Any questions?