1. Investment Forum Regulatory Update Round 2 - 2018

2. Learning Objectives
Gain an understanding of the forthcoming Senior Managers & Certification Regime (SM&CR) and the implications to your firm
Gain an awareness of the Insurance Distribution Directive (IDD) and the practical implications of this regulation
Gain an understanding of the latest regulatory developments and changes made to the SimplyBiz website as a result 

3. Senior Managers and Certification Regime

4. Purpose of the SM&CR The regime aims to:
- encourage staff to take personal responsibility for their actions
- improve conduct at all levels
- make sure firms and staff clearly understand and can demonstrate who does what
We were told by FCA the rules for smaller firms would be ‘proportionate’

5. SM&CR DAY
Pre SM&CR
9th December 2019
Post SM&CR

6. Pre SM&CR Day All firms will be ‘mapped across’
Firms will need to ensure the right people are registered to the right roles
Only senior managers will be registered with the FCA

7. Senior Managers
SMF1 – Chief Executive
SMF3 – Executive Director
SMF9 – Chair (non-executive director)
SMF16 – Compliance Oversight
SMF17 – Money Laundering Reporting Officer
SMF27 – Partner
REMEMBER
Ensure the right people are in the right roles before 9th December 2019

8. Identify Certified Persons
Applies to individuals who are not senior managers
It is designed for individuals whose job means they can have a big impact on customers or the firm
It includes functions that require a qualification
It also includes people who are responsible for other certified persons
Investment advisers
Mortgage advisers
Pension transfer specialist
Office managers?
Supervisors?
Paraplanners?

9. Conduct Rules Conduct rules will apply to all SMs and CPs
Training must be delivered for each role before date of implementation
These are similar to Approved Persons regime but with expected standards quoted

10. HAPPY SM&CR DAY! 9th December 2019 Firms will adopt the ‘core’ regime
This will allocate responsibilities and duties to Senior Managers and Certified Persons

11. Senior Managers
Each senior manager will be allocated: Statement of Responsibilities This will be a template produced the FCA Prescribed Responsibilities Similar to current Approved Persons regime Duty of Responsibilities To prevent or report breaches

12. Up to and beyond

13. SM&CR – General Requirements
New Conduct Rules will apply to all staff
Senior managers
Certified persons
All other relevant staff
Training on conduct rules must be given setting out responsibilities for each role
Annual assessment of Fitness & Properness
Notify FCA of any disciplinary action

14. Joiners / Leavers

15. Senior Managers – New Regime
All senior managers need to be approved by FCA
On application a criminal records check must be submitted
The same applies to internal transfers!
Establish structure before SM&CR!

16. Regulatory References
SMs & CPs
Regulatory References
There will be a standard template for all firms
Disclosure of information over previous 6 years
Must include any disciplinary action
Review references in light of new action arising

17. SM&CR – The Outcome
SM&CR will help shape the culture, standards and policies of firms as a whole and promote positive behaviours that reduce harm

18. Register of Advisers
The FS Register will no longer show customer functions i.e. investment advisers
Consultation proposing to introduce a new public directory
This is proposed to go live on 9 December 2020

19. The Directory
Firms will be responsible for keeping the information up to date using CONNECT
The FCA will not edit the information that firms submit before publication
This will include those providing a qualified customer facing regulated service. This will include mortgage advisers
£250 admin fee for late or inaccurate data

21. SM&CR – What Next
The SimplyBiz Group will provide a detailed guide on this new regime
SimplyBiz Group will provide you with templates for each of these processes
SimplyBiz will provide a service to demonstrate your compliance with this regime
Workshops???

22. Would you be interested in a SM&CR workshop?
This slide is a ppvote question
Yes No
Yes No

23. MiFID II & The IDD

24. II

25. MiFID & IDD business?
Shares
Units in collective investment schemes
Investment trusts
Exchange traded funds
Investment bonds
Protection with an investment element

26. Application of MiFID II & IDD
Some changes apply to MiFID business only
Some change apply to IDD business only
Others apply to both MiFID and IDD
Some apply to all investments i.e. MiFID, IDD, pensions, etc.

27. Client Agreements
Client agreements have been updated to reflect MiFID & IDD:
Confirms you only accept written instructions
Spells out disclosure requirements of the IDD
Removal of Data Protection for GDPR

28. Suitability Reports Change to the definition of advice
A personal recommendation is to:
Buy,
Sell, or
Hold
Reports must be issued before conclusion of the transaction / contract

29. Suitability Reviews
Where the firm carries out a review of suitability it must be carried out at least annually for MiFID and IDD business
Does not apply to non-MiFID/IDD business!
A suitability report must always be provided

30. Disclosure – MiFID & IDD
This brings in a new regime for disclosure of costs and charges
All costs and charges have to be aggregated
This is designed to ensure clients understand the purchase cost and on-going cumulative effect on the return

31. Disclosure of charges
Disclosure does not apply to non-MiFID/IDD products
For MiFID & IDD disclosure must be made:
Ex-ante
Ex-post
Ex-post is:
3rd January 2019 for MiFID
1st October 2019 for IDD

32. Discretionary Portfolio Managers
Where a client’s investment suffers a 10% depreciation they must be notified
Only applies to MiFID investments
Check the agreement and any addendums where you are the client of the DFM

33. Independence
Independence is to consider a range of products but to include structured deposits and cash
This is not all retail investment products
CPD should cover all products
CPD will need to include 15 hours of IDD products

35. SimplyBiz Support

37. Website New Documents Updated Documents Deleted A recruitment guide
A guide to appointing an introducer
Updated Documents
File review standards
Compliance plan
Disaster recovery plan
Deleted
Enhanced suitability questionnaire

38. Learning Outcomes
Gain an understanding of the forthcoming Senior Managers & Certification Regime (SM&CR) and the implications to your firm
Gain an awareness of the Insurance Distribution Directive (IDD) and the practical implications of this regulation
Gain an understanding of the latest regulatory developments and changes made to the SimplyBiz website as a result