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    • FSTP LLP in partnership with AlgoMe invite you to a lunchtime round table discussion on the most pressing issues in today’s industry; digital skills shortage and the apprenticeship levy
       
      Introducing your hosts:
      FSTP LLP, a Main Provider for Apprenticeships offering Financial Services, Leadership and Management Apprenticeships, will be on hand to share insights and experience AlgoMe, the community for the Investment Management industry, connecting professionals from Asset Managers, Wealth Managers and FinTechs with their wider industry ecosystem will be on hand to discuss skills and transformation in the industry  
      The event:
      12.30 - 12.50
      Your co-hosts Rob Carter and Andy Milner, AlgoMe will give an overview of demand for retraining and tech skills, based on the latest AlgoMe report; The Disrupted Career: FinTech, Innovation and The Future Of Careers In Investment Management Followed by Philippa Grocott and Nicola Spennati from FSTP LLP, will give an overview of opportunities for using the apprenticeship levy and how to do so effectively within the industry sector 12.50 – 14.00 Group discussion over lunch
       
      Attendance is limited and on a first come first serve basis. Please contact andy.milner@algome.com if you would like to attend.
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    • The Disrupted Career
       
      Welcome To The AlgoMe Report On FinTech, Innovation And The Future Of Careers In Investment Management
       
      This report aims to address key questions that are important to everyone working in or looking to join the Investment Management Industry.
       
      How significant will the impact of FinTech be on career paths? How likely is my current role to be affected? Where are the opportunities in this disruption? How can I best position myself for future success?  
      We asked a panel of Investment Industry professionals their views.
       
      The full report is available for download to all AlgoMe Community members. Not already joined? Becoming a member takes less than a minute.
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    • With the decorations up, the last order date for Amazon nigh and most of us looking forward to at least a few days break, it’s always a good time to take stock of what’s been achieved over the last 12 months.
       
      For AlgoMe this has been another exciting year.
       
      January started in style with the launch of the AlgoMe Careers mobile app – giving professionals the opportunity to find their next career opportunity on the move.
       
      Then in July we released our Industry Pulse Report – a check on what the industry was thinking about key topics such as Brexit, Pay Gap Reporting, MiFiD II and GDPR. Unfortunately it seems that the uncertainty that the industry was feeling due to Brexit is unlikely to have receded in the intervening period, but it’s good to see progress starting to be made in other areas such as gender and diversity.
       
      In September we launched AlgoMe Community – a place for the Investment / Asset Management industry to come together, providing professionals with ways to grow their knowledge, profile and network. We’d like to say a big thank you to all of the members that have joined and contributed and look forward to continuing growth in 2019.
       
      In November AlgoMe joined the Investment Association, becoming a Fintech member and working closely with Velocity, the Association’s new Fintech accelerator. This is a really exciting initiative and we’re looking forward to doing more with Velocity in the near future.
       
      We also launched our Mentoring matching service in November – designed to help AlgoMe Community members connect with the best individuals within the community to help them to reach their career goals using a simple but intelligent process. If you haven’t already signed up to be a mentor or a mentee, please do spend 5 minutes now and tick off a New Year’s Resolution early.
       
      As we go into the end of the year, we have also launched our survey on Investment Management, Fintech and the future of careers. The impact of Fintech on the industry is going to accelerate rapidly in 2019, but what has been less well documented is the impact on individuals, their careers and the skills they’ll need to succeed in a more digitised environment. We really value the input of our community members, so please spend a couple of minutes filling out the survey and we’ll make sure you’re the first to hear the results early next year.
       
      From me and the AlgoMe team, I wish you all a very happy holiday season and look forward to another year of exciting announcements and change in 2019.
       
      Rob
       
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    • I have always struggled to see a fair reason why employers should be allowed to ask about a potential hire’s current remuneration, other than to give them an advantage in pay negotiations.
      It’s something which can only exacerbate existing pay inequalities and  it’s abolishment can surely only be a positive thing.
      Here the Guardian argues specifically about its impact with regards to the gender pay gap:
      https://www.theguardian.com/commentisfree/2018/aug/23/gender-pay-gap-current-salary-question
      I believe this has already been outlawed in some US states?
      @Jonathan Max - would be interesting to hear the view from HR. 
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    • The Investment Association recently gave the industry a boost when it announced the launch of Velocity, its FinTech accelerator.  Designed to identify, develop and accelerate best in class firms with innovative solutions, Velocity will champion and facilitate the wider adoption of technology across the industry.
       
      And AlgoMe will be involved in this too, which is why I’m excited to announce we are now a member organisation of the Investment Association as an official FinTech member and have been named a "company to watch" by Velocity.
       
      Challenging Times
      The Investment Management industry faces major challenges and opportunities from forces such as digital technology, pressure on fees and increased regulation, while at the same time there are widespread changes in the workforce and their expectations.
       
      To date, Investment Management has both been fairly insulated from the challenges posed by agile FinTech competitors, but also distant from the opportunities offered by the new technologies and ways of thinking that such companies bring.
       
      Bringing FinTech closer
      Velocity is a fantastic step towards accelerating the adoption of FinTech. It has received support and endorsements from both inside and outside the industry, including from the Chancellor of the Exchequer, Phillip Hammond, who was enthusiastic about the initiative at a recent City event.
       
      To drive change and innovation, the industry needs to connect across different disciplines and areas of expertise, driving new ways of thinking and fostering cultural change.
       
      Without the benefit of emerging FinTechs and their external expertise, it will be hard for incumbents to harness the benefits of emerging technologies such as Straight Through deal Processing (STP), Distributed Ledger Technology (DLT), and Artificial Intelligence (AI) in areas such as risk and compliance, securities trading and investment decision making.
       
      Our Mission
      AlgoMe's mission is to connect the Investment Management industry and empower professionals to manage their careers. Our new product, AlgoMe Community, is placed to become the hub for the discussion between FinTechs and the companies and professionals in the wider Investment Management ecosystem.
       
      Join AlgoMe Community today
       
      AlgoMe Community - community.algome.com
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  • Related Content

    • Colin Ng
      By Colin Ng
      Continuing with our thinking of CMU & the future of EU Supervision, it’s apparent the creation of a Single Capital Market, brings with it a need to have a single set of rules to govern it. Early last year ESMA launched an Interactive Single Rule Book for the securities market to help market participants understand the Level 1, 2 and 3 rules laid out in order to facilitate consistency in application across the member states.
       
      However, this is not as straightforward as it looks. Whilst a single rule book for all member states is important (and the ESMA will ‘watch’ over it), the EU still has to recognise that a certain degree of national independence is afforded to the member states and its supervisory authority/ies as well.

      We observed over the recent years that there has been a steady concentration of power at the ESMA, with some parties crying ‘land grab’ by the EU as a result of the UK’s imminent exit from the bloc. This may also be in part borne out of the growing call from the Commission for ESMA to play a stronger role in enhancing convergence. In a nutshell, this is the convergence dilemma: How much is too much centralisation / concentration?
       
      What does it mean for investors, businesses and the asset management industry?
      Historically, retail investors & businesses in the EU have preferred safer investments, i.e. more willing to invest within their national borders and in debt than in equity for fear of less certain returns.

      A key objective of the CMU is to increase the range and choice of investments available to investors and businesses. And this is where we see the asset management industry can play a key role.

      Armed with years of cross-border investing experience and management expertise, asset managers are able to assume the position as the ‘gel’ that brings together the interest of investors, businesses and new investment opportunities offered by the wider financial markets.

      From an investor perspective, by making it easier for small and medium sized enterprises (SMEs) to raise capital on public markets, they have a wider range of investments to choose from leading to a potentially better diversified portfolio. However, these less established firms do come with a higher risk (and also higher expected returns) so acceptance and general take-up will take time.

      For SME businesses, this is good news as the ‘promised land’ of public market capital may no longer be a thing for the distant future but something that can be seriously considered in the short to medium term. Having said that, businesses still have to weigh up the pros and cons as high listing fees and initial low take-up may still be deterrents.

      CMU proposals are also opening up more avenues for SMEs and infrastructure projects to secure financing through pan European crowd funding platforms and cross-border business angel networks.
       
      What does it mean for product development?
      The CMU proposals and legislations to date have offered up new financing avenues and investment opportunities, with the addition of new products, fund vehicles and investment strategies, all geared towards the vision for a border-less capital market in the EU.

      The European Long Term Investment Fund (ELTIF) Regulation, which came into force in 2015, created a new AIF cross-border fund vehicle that enables asset managers to offer investment opportunities in SME capital, infrastructure projects and real estate projects within the EU. They essentially have been created to raise funds to channel towards public projects and smaller businesses which historically have had less luck with raising capital.

      Having said that, ELTIFs generally offer fewer liquid assets (hence higher returns and more diversification) but is another example of how the CMU have created different investment strategies.

      Another important theme arising from the CMU proposals is the alignment with improving the market’s understanding of environmental, social and governance related risks and returns (responsible investing). It seeks to provide opportunities to connect capital with greener and sustainable infrastructure projects and SME businesses.

      Another important measure from the CMU proposals is to promote retail savings and investment through capital markets via the creation of a pan-European Personal Pension Product (PEPP).

      The introduction of PEPP has increased choice for retirement savings and builds an EU market for personal private pensions which pension providers could opt for when offering private pensions across the EU. Importantly also, it helps to channel EU savings to much needed long-term infrastructure investments.

      Four years on, we observe that take-up has been relatively low with only a couple of Italian fund houses having set them up (Muzinich & Cordusio SIM, and Eurizon). The right incentives have to be looked at, and there is still work to be done to local level tax laws to remove any cross-border obstacles. Also, consideration needs to be given towards a more suitably calibrated calculation of the regulatory capital that institutional investors should hold against infrastructure investments.

      With new products and investment strategies, comes the need for enhanced promotion of financial education and setting up a market infrastructure to improve financial regulation and market efficiency. Though take-up is relatively low at the moment with ELTIFs and PEPP, we see this is as expected as it requires a cultural shift. Rome was not built in a day.
       
      What does this all mean and what is left to do?
      Careful expectation management is important here. The Juncker Plan is ambitious, and the CMU is not any different. Capital markets are still fairly diverse and for all EU28 states (maybe 27 in a few months) to fully embrace the changes and lower their national barriers, less political hustling and more results need to surface (which also begs the question of how we can concretely measure its success). All member states need to accelerate discussions of the remaining proposals with a common goal in mind; much-needed lasting reform of the European financial markets.

      The recent European elections will bring a new Parliament into Brussels. It remains to be seen what future impact this new Parliament will have on the outstanding CMU work. However, with economic short-termism, nationalism and populist politics on the rise in recent years, now is the time more than ever for initiatives such as the CMU to deepen the unity of the EU.
       
      This article originally appeared on the AlgoMe Consulting web site
       
      Authored by Colin Ng and Pierre-Yves Rahari 
    • Pierre-Yves Rahari
      By Pierre-Yves Rahari
      Juncker once famously said “Borders are the worst invention ever made by politicians”.
      Since taking up office in 2014, his Commission has been addressing exactly that: Remove obstacles for sustained improvement to the economy which will benefit the European people, regardless of where they are located. This is embodied in Juncker’s ambitious Investment Plan for Europe.

      Five years on from the conception of Juncker’s Plan, it has been reported that EU GDP is up by 0. 6%, it is set to create 1.4 million jobs by 2020 and has helped to mobilise billions in private investment for the public good (exceeding original target of €315 billion).
      These are not modest statistics – Juncker’s Plan is showing results and have laid down the foundations for further growth in the future. But there is still much to do.

      A key ingredient in Juncker’s Plan is the Capital Markets Union (CMU). Since 2014, EU press have been dominated by a blizzard of challenging news; the monumental bailout of the Greek economy, a migration crisis and more recently, the UK’s Brexit referendum result so it is no wonder the CMU has had modest publicity to date. But it is an important Single Market project and one of the key pillars of Juncker’s Plan.

      Essentially, the CMU’s key objective is to improve the free flow of investment all across Europe by providing the infrastructure to encourage people and companies to look across their national borders for investment opportunities and capital to benefit its people, businesses and infrastructure.

      The CMU & the future of EU Supervision
      Refreshingly, the CMU is not another stand-alone piece of regulation or legislation that adds to the mounting compliance burden that most European firms are already grappling with. Instead, the CMU is an umbrella for 23 separate but complementary proposals; a few of which have been adopted into legislation so far.

      In its essence, most of the proposals formed under the CMU umbrella is to move the European economy in one direction; To rejuvenate investments and deepen its integration by harmonising national regulation, legislation and supervision, and breaking down obstacles to cross-border investments.

      As with any growth programmes, ensuring that proper safeguards are in place is crucial to ensure lasting and sustained results, whilst protecting all parties involved. To be fair, major European regulations introduced in recent years such as MiFID II (and also those about to be enforced e.g. PRIIPS) are playing a part in this vision for Europe by enhancing investor protection, increasing transparency and improving market efficiency to bring the confidence back into the European investments market. Though it may seem that the list of new regulation is ever increasing, we see that the themes and ambition are very much aligned.

      With respect to supervision, removing national obstacles to cross-border investment and flow of money has accelerated the call for supervisory and regulatory convergence in the EU. This is particularly important in the area of funds distribution to encourage more cross border investments and support the creation of a Single Capital Market.

      Perhaps, another argument for more commonality in supervisory principles, outcomes and culture is that one must also consider that breaking down national barriers may come with risks to the financial stability of the bloc. National crises will no longer be contained in the scenario of a true Single Market; the European Union will truly be operating as one. Enhanced convergence in supervision will help to address this new systemic risk and has been a strategic priority of the CMU proposals.
       
      This article originally appeared on the AlgoMe Consulting web site. 

      Authored by @Pierre-YvesRahari and @ColinNg
    • Lydia Francis
      By Lydia Francis
      The following is a brief overview of the Treasury Select Committee meeting with the Financial Conduct Authority on 25th June 2019.
       

       
      Woodford Investment Management
      Unsurprisingly, the highly anticipated subject of Woodford Investment Management’s (WIM) shortcomings was the first topic for discussion at the meeting.
       
      The following observations are FSTP’s own view of the possible implications of Woodford Investment Management’s demise (we still don’t know what we don’t know and feel this subject has got some distance to run before all the facts are known).
       
      Key points:
      This failure of a retail fund will have serious and lasting impact on the operation of Asset Management in the UK.
      It throws into sharp relief the requirements falling out of the FCA’s Asset Management Market Study, in particular the need for independent Non-Executive Directors (NED) to challenge at Authorised Fund Manager (AFM) level and the production of qualitative value for money statements for all UK funds.
       
      From what we heard, we suspect there will be changes to the rules governing the liquidity of funds which retail investors are able to invest in. Andrew Bailey (FCA’s CEO) highlighted the Regulator’s view that European Union (EU) legislation has failed to manage retail funds. However, FSTP is concerned about an over reliance on principles based regulation (i.e. living within the ‘spirit of the rules’) in this area of Financial Services. Our clients operating in this arena are always looking for clarity and are generally welcoming of prescriptive rules in this area.
       
      Despite the introduction of formalised rules on product governance via MiFID II’s implementation in January 2018, distributor/manufacturer relationships and due diligence arrangements appear to be falling well short of regulatory expectations. We surmise that this is likely to result in a greater degree of regulatory intervention.
       
      The remuneration of individuals will attract the attention of the wider media and public as this situation develops. In this instance the Senior Managers and major beneficiaries of fees charged are one and the same. On the face of it there appears to be precious little individual accountability and a lack of challenge by others – the prevailing attitude seemingly being, “We pay ourselves what we think we are worth”. However, when that premise is built upon the investments of retail investors (bear in mind how much pension fund money will be tied up here) there has to be a day of reckoning. The message? If you are not providing retail investors with the service they have been led to expect, you cannot continue to reward yourselves so disproportionately. In short, Senior Managers must now be seen to be taking a more overt, moral stand on what is right and fair.
       
      Bailey was very strict to follow what he’s already told the media and the Committee’s Chair Nicky Morgan’s question, “Does anyone at the FCA read the papers and listen to what’s going on in the industry?” received a curt reply.
       
      The question, “Is it a failure of rules, or a failure of FCA supervision?” received a straight forward response of, “A failure of rules”, with Bailey’s reasoning being that whilst WIM has often had long periods of strong performance and long periods of poor performance, in this instance it is has not been able to save the situation, or the many reputations that have been tarnished as a result.
       
      The responsibilities of Link – the AFM for Woodford Funds – was centred on by Bailey who reiterated the regulatory contact that is now well publicised. The Committee observed that Link – previously owned by Capita – did not have a good record of managing Investment Managers on behalf of investors, given they were at the centre of the Arch Cru issues. (N.B. An article in the FT on 25 June alleges that the FCA pressured WIM into using the services of Link – as the largest provider of ACD services – in order for the necessary regulatory permissions to be granted).
       
      The relationship between WIM and Hargreaves Lansdown (HL) was raised by the Committee and it became obvious that once the immediate issue of fund liquidity is resolved, a review of the relationship between distributors and manufacturers will be instigated. (N.B at the Investment Association’s annual Policy Conference on Wednesday (26 June) Morgan remarked that the methodology behind Wealth 50’s composition raised questions as to whether customers are being treated fairly, after the TSC received a letter from HL confirming that its influential Wealth 50 list was not solely compiled on performance and that WIM’s inclusion on the list, despite under performance, was impacted by fee discounts offered to the platform).
       
      Justice for individuals
      A common theme throughout the discussion was ‘justice for individuals’. There is a high degree of dissatisfaction with the complexity of regulation and the consequent lack of clarity for consumers and practitioners alike, with the suggestion being made for the FCA to sort their impenetrable verbiage as most people don’t understand certain aspects such as T&Cs. This concept was understood by attendees from the FCA, who proceeded to mention that they do have enough resources to deal with all issues, and a review of systems and capabilities needs to be looked into.
       
      The FCA was forced to comment on its responsibilities under the Equality Act, bearing in mind TSC’s disappointment with the Regulator’s response to the report, ‘Consumers’ Access to Financial Services’, published by the Committee in May 2019. FCA’s Chairman, Charles Randell, stated that this is, “By no means us saying we don’t take our responsibility to consumer vulnerability very seriously”.
       
      Culture
      Culture was brought into question and Randell mentioned that the FCA’s focus is shifting to outcomes supported by principles. After some bad tempered exchanges Rushanara Ali, MP quipped, “Some would argue that you are not tough enough with bank bosses…are you too nice to bankers. Is it better to be feared, than liked or loved?” Bailey’s quick response of, “I don’t get up in the morning hoping people will love me”, will surely resonate for some time. He also added the FCA has 650 investigations currently underway, compared to the 250 when he took on the role.
       
      Brexit
      Of course, Brexit did rear its head and Bailey made frequent references throughout the discussion to the fact that regardless of the issues raised and the revisions suggested, Brexit will have a big impact on the FCA’s plans, such as the intended investment in data analytics. However there will be one area that can be assured of relatively no change post-Brexit, the Senior Managers & Certification Regime – it was made clear that the Regime will be implemented in its entirety.
       

       
      And finally....
       
      Overall, Randell (above left) and Bailey (above right) held their own against some intense questioning, but one wonders how much Bailey’s ambition to be the next Governor of the Bank of England tempered his responses.
       
      This was first published on the FTSP LLP blog.
    • Colin Ng
      By Colin Ng
      'Be ready to think about the 10-15 year view of the industry and be a part of that change'. Many other insights from this recent interview he gave to the Square Mile:
      1) Mass personalisation of investments & tokenisation to increase accessibility and liquidity
      2) Portfolios of the future will be a blend of public and private investments. Public companies are shrinking/consolidating. There is much potential to unlock in the private space
      3) Sustainable investing and ESG funds will grow in demand as next generation of investors will want their money to go further to make more positive societal impacts
      4) Diversity of thought is business-critical - solving problems is best done in a more diverse group
      5) Mental Health in the city is bigger problem than anticipated. We need to foster a culture (top-down) where it is ok to talk about it and support each other
       
      On top of that, he exhibited much humility. Must Watch IMHO! 
    • Caroline Sheldon
      By Caroline Sheldon
      For those of you who would love to read another Brexit related article... here is are some of the latest updates- including an interesting update with respect to the temporary permissions regime published in the Netherlands! With less than two months to go until the UK leaves the EU, there has been a lot of recent Brexit related developments in the financial services industry, some of which we look at below. 
       
      THE TEMPORARY PERMISSIONS REGIME
      UK Financial Conduct Authority (“FCA”) has pushed ahead with its “no deal” planning and has opened its Temporary Permissions Regime (“TPR”) notification window to EEA asset management firms and to investment funds marketing in the UK. The TPR will allow firms currently passporting into the UK to continue new and existing regulated business within the scope of their current permissions in the UK for a limited period, while they seek full FCA authorisation, if the UK leaves the EU on “exit day” (11pm on 29 March 2019) without an implementation period in place. It will also allow certain funds to continue temporarily marketing in the UK on the basis of current European marketing passports and rights, with no need for a hiatus before they are able to comply with UK marketing regimes.
       
      The FCA has said that firms should not wait for confirmation of whether there will be an implementation period before they submit their TPR notification, as firms and investment funds that have not submitted a notification within the notification window will not be able to use the regime.
       
      All notifications must be made by the FCA’s Connect online system. The FCA has published a guide for the Connect online system available here.
      The notification window remains open until 28 March 2019. There will not be a fee for making a notification under the TPR. 
       
      THE FINANCIAL SERVICES CONTRACTS REGIME REGULATIONS
      On 8 January 2019, the FCA published a consultation paper, CP19/2, which sets out details of the financial services contracts regime (“FSCR”) and the rules the FCA proposes should apply to firms during the regime. The consultation closed on 29 January 2019.
       
      The FSCR Regulations aim to further reduce the risk of harm associated with an abrupt loss of permission on exit day. This ensures that EEA passporting firms can still fulfil their existing contractual obligations in the UK for a limited period of time, even if they are outside the TPR following the UK’s withdrawal from the EU, provided that firms must satisfy the conditions of the FSCR. This legislation will be relevant for those EEA firms which passport into the UK to carry on a regulated activity who fail to notify the FCA that they wish to enter the TPR or are unsuccessful in securing authorisation at the end of it, but still have regulated business in the UK to run off.
       
      Firms will fall into one of two categories under the FSCR: being supervised run-off (“SRO”)for EEA firms with UK branches or top-up permissions in the UK, and firms who entered the temporary permissions regime but did not secure a UK authorisation at the end, andcontractual run-off (“CRO”) for remaining incoming services firms.
      The SRO will apply to the following firms:
      -          firms currently operating in the UK via a branch;
      -          firms who enter the TPR but exit without securing full UK authorisation; and
      -          firms that currently hold top-up permissions.
       
      As it is the case for firms in the TPR, SRO firms will be deemed to have Part 4A permission for carrying out activities within the scope of their passport as at exit day, to the extent necessary to continue to service pre-existing contracts in the UK. Unlike the TPR, no notification is required for this deemed permission to arise; it will apply automatically. Details of SRO firms will be shown on the Financial Services Register.
       
      The FCA's powers over SRO firms under FSMA will continue to apply; however, the FCA will also cover certain matters which were previously handled by the firms’ home state. In addition, SRO firms will be required to maintain their home-state authorisation in order to benefit from the regime.
      The CRO will apply to firms operating in the UK solely on a services basis (i.e. without a UK branch) that do not enter the TPR and have pre-existing contracts in the UK which would otherwise require a permission in order to service.
       
      CRO firms will be treated as exempt persons and will not be UK authorised. Similarly to the SRO, this exempt status will allow firms to perform regulated activities within the scope of their passport as at exit day to the extent necessary to continue to service pre-existing contracts in the UK after exit day.
      The FSCR will apply for a maximum of 5 years for all contracts, except for insurance contracts which will have a maximum of 15 years. The Treasury may extend these periods, if necessary, based on a joint assessment by the FCA and the PRA.
       
      THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AMENDMENT EU EXIT) REGULATIONS 
      At the end of 2018, HM Treasury has published a draft version of the Financial Services and Markets Act 2000 (Amendment EU Exit) Regulations 2019 (the “SI”). The SI makes a number of amendments to the Financial Services and Markets Act 2000 (“FSMA”) to ensure that the financial services framework continues to operate effectively once the UK leaves the EU, in any scenario. However, the SI is not intended to make substantive policy changes. The amendments to FSMA are set out in part 2 of the Regulations; with regard to FMSA, HM Treasury has highlighted particularly that amendments are being made to:
      -          regulated and prohibited activities (Part 2);
      -          permission to carry on regulated activities (Part 4A);
      -          performance of regulated activities (Part 5);
      -          control of business transfers (Part 7);
      -          control over authorised persons (Part 12); and
      -          provision of financial services by members of the professions (Part 20).
       
      Please click here to view the explanatory information and the draft instrument. 
       
      TEMPORARY PERMISSION REGIME PUBLISHED IN THE NETHERLANDS
      An amendment to current Dutch legislation was published on 4 February 2019 which allows investment firms from the United Kingdom to continue to provide investment services to professional clients in the Netherlands in a no-deal Brexit scenario.
       
      Under an existing third country exemption regime (following from article 10 Exemption Regulation FSA) investment firms based in Australia, the United States of America and Switzerland are exempted from the MiFID licence obligation if they (i) exclusively provide investment services to per se professional clients or deal on own account; and (ii) are subject to regulatory supervision in their home state.
       
      This regime is amended to temporarily expand the exemption to investment firms based in the UK. The Dutch temporary permission regime (“Dutch TPR”) will enter into effect if and when the UK leaves the European Union without a deal and it is expected to last until 01 January 2021.
       
      The Dutch TPR is relevant for investment firms with their registered office in the UK that wish to continue providing investment services to per se professional clients or dealing on their own account in the Netherlands post-Brexit. The Dutch TPR is also of interest to Dutch firms being serviced by UK investment firms as it avoids disruption of current servicing.
       
      Firms wish to pursue this option, they should submit a notification form to the Netherlands Authority for the Financial Markets.
       
      NEXT STEPS
      Preparing for Brexit is challenging- particularly as a result of the uncertainty over what type of deal the UK may be left with when the UK leaves the EU on the 29 March. However, the good news is that different European countries are now preparing for a "no deal" Brexit, with a wave of recent national legislation aiming to ensure both financial and regulatory stability. This should provide UK asset managers with additional time and flexibility to adapt to this new regulatory landscape.
       
      For more information, and any guidance or advice on the impact on Brexit, Cleveland & Co, your external in-house counsel, are here to help- let us know what you think and if you have any queries!
       
       
      DISCLAIMER
      No individual who is a member, partner, shareholder, director, employee or consultant of, in or to any constituent part of Cleveland & Co Associates Limited accepts or assumes responsibility, or has any liability, to any person in respect of this document. Copyright in the materials is owned by Cleveland & Co Associates Limited and the materials should not be copied or disclosed to any other person without the express authorisation of Cleveland & Co Associates Limited. This document is not intended to give legal advice and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. Readers must take specific legal advice on any particular matter which concerns them. If you require any advice or information, please speak to your usual contact at Cleveland & Co Associates Limited.
       
       
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