Round Up Spring 2019

Quick catch up... With so much happening within the marketplace, it’s sometimes difficult to see the wood for the trees. Use this section as a quick refresher, or catch up. Naturally, if you have any queries, please don’t hesitate to contact us.

Falls in financial markets cause client portfolios to lose value

Recent falls in financial markets have led to some client portfolios losing value. Those that have fallen by over 10% trigger the MiFID II requirement to notify investors of the losses sustained. Usually the responsibility to report sits with the fund manager, however this responsibility can be passed on to platforms or advisory firms in certain cases. What you should do If you’re an advisory firm with no investment management permissions, you’re not required to report portfolio losses, unless you’ve entered into an arrangement to do so. For example, if a firm uses a discretionary fund manager (DFM), on an acting as agent basis, and the contract between the firm and the DFM passes this responsibility on to the advisory firm. In these circumstances, the ‘end of business day’ deadline* applies.

If no such agreement is in place, we recommend that the advisory firm passes the information to its end client as soon as is practically possible. If you’re a discretionary management firm, the responsibility for reporting lies with you, unless you’ve contractually passed this requirement onto an advisory firm or platform. A firm providing a discretionary management service is required to inform a client where the overall value of their portfolio (as evaluated at the beginning of each reporting period) depreciates by 10%, and further multiples of 10%. *This must be done no later than the end of the business day in which the threshold is exceeded, or in a case where the threshold is exceeded on a non-business day, the close of the next business day.

New! Senior managers and certification regime zone Our new SM&CR zone contains detailed guidance on how to prepare for the regime including: • The actions you need to take to implement the new conduct rules with your team. • How to appropriately allocate responsibilities to senior managers, and • How to correctly certify relevant staff. Specific project plans, relevant to your firm (limited scope, core and enhanced regime) are also available, together with a range of downloadable guides, template documents, training videos and remote learning modules.

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