Gary Pitts

Calling all smaller asset managers. The Independent Investment Management Initiative will be responding to the Financial Conduct Authority’s Call for Input on Consumer Duty. In their webinar this morning, Consumer Duty - 1 year on, they highlighted their desire to engage with practitioners on the TCD requirements with a view to staying focused on what is really required to improve customer outcomes. Culture is key and we know this isn’t a one-time piece of regulation but rather a long-term expectation of firms to continually focus on putting customers first. I look forward to hearing from you on your views. #consumerduty #culture

13

Reflections on 12 months in the CIO seat - A year ago I joined the team at People’s Partnership with a simple idea - that a small focused team of investors working with purpose and conviction could re-write the script for UK asset owners, just as the Master Trust space was getting to scale. I’m grateful that Patrick and the board backed that vision! It was a big step up for me in my career. We’re still on a build, a work in progress with lots to be done. But I’m super proud of what we’ve managed to achieve over the last year bringing together a diverse, seasoned group of investors steering the People’s Pension toward £30bn and beyond. Thank you to my great team as well as all of our support teams at People’s Partnership and all of you out there who have responded helpfully to our questions and enquiries! A few earlyish reflections and lessons learnt - Face to face brings the magic. Bringing all 20 of us together face to face twice a week in one room to scan ahead, take decisions and get aligned has been essential to moving at pace. Dare I say it’s also quite … fun? Energising? It’s not just about sitting there in the office it’s about being thoughtful about how we come together and use that time. And pastries + coffee, of course. Personality matters. Ever-evolving challenges of bringing diverse personalities together as a team has fascinated me for years. I tend to hire in my own personality mould, which has its benefits and drawbacks. Focus. There’s always a dozen things we **could** do, but to make any real progress we have to pick the two or three that move the dial, prioritise and get good and saying “no” or “not now” to others. The struggle is real! Ownership. Being really clear on who’s job it is to do what then standing back and enabling/supporting them to deliver gets things done. Obviously it’s essential to be working with great people you can trust to do that. Implementation matters. Coming from a consulting background I knew this would be one of the areas I had most to learn. Investment ideas are only as good as the implementation so you have to constantly have an eye to this. Learning from others - I’ve got a huge amount out of speaking with other CIOs, especially overseas, even quite short conversations. Constant planning and forecasting is vital. Not because the plans and forecasts are right (they are usually wrong and can be very wrong ) but the discipline and habit associated with the planning process is so valuable. So much great work remains to be done, let’s do this! Here’s to small teams doing important work

288

32 Comments

AFME (Association for Financial Markets in Europe) warns that the Financial Conduct Authority's proposals for research rebundling "may not be optimal" because it is not "sufficiently flexible". Great story from Lucy Carter. #markets #trading #research #regulation #finreg #rebundling #marketstructure

4

Ensuring the consumer redress systems work predictably, efficiently and fairly for all concerned is of paramount importance to the UK. Should there be a separation between sophisticated business claimants claiming redress and consumer claimants to address consumer vulnerability? Do conduct rules work, are large institutions adequately held to account? Is the current uptick in group actions the answer? Where does access to justice feature in the debate? How can global businesses mitigate the risk of global mass redress claims or predict their redress strategies across competing jurisdictions with competing legal systems and procedures? Does the UK risk becoming a mass tort mecca or is there a way to learn the US lessons and avoid some of the unintended consequences of that regime. The Government, Sir Keir Starmer, The Right Hon Rt Hon Rachel Reeves, the Financial Ombudsman Service, the Financial Conduct Authority, the Civil Justice Committee, the Lord Chancellor, the Right Hon Shabana Mahmood, her predecessor Alex Chalk KC, the judiciary and the Civil Procedure Rule Committee and the Ministry of Justice UK are just some of those who have a lot of work ahead to fix the system.

3

I am encouraged by the Chancellor’s first Mansion House speech’s focus on investment and reform. Rachel Reeves has given confidence to the financial services sector and business to invest and grow. As I have said before, we need a new approach to financial regulation that takes into account the wider impacts on growth and competition. We welcome the Chancellor’s proposals to reform financial regulation to make it more dynamic and the sector more competitive and allow a greater, while sustainable, approach to risk. UK regulators have had a long history of innovation and best practice - it is no accident that the country is a leading light in global fintech, attracting $7.3bn in investment in H1 2024 according to KPMG. Yet, we have seen instances of regulators placing requirements on payment service providers, both large and small that have the effect of reducing competition in the long term, to the detriment of customers. We welcome the Chancellor's words and her accompanying 'remit' letter to regulators to ask them to focus more on growth. On investment, we welcome the pensions review. The government estimates it can unlock up to £80b to invest in assets with higher returns - such as private equity and infrastructure - which should also help reinvigorate the UK's capital markets. We believe there will be significant economic benefits if this supports large-scale investment in innovative and fast-growing UK companies - whether these are start-ups, listed companies or late-stage private companies - allowing these businesses the finance they need to innovate and scale. Elsewhere, we are encouraged by the announcements on the National Payments Vision, which underlines the importance of developing a new fraud strategy with more focus on fraud prevention and a cross sectoral approach, targeting technology and telecommunications sectors. UK Finance calculated that more than £570m was stolen in payment fraud in H1 2024, as criminals ruthlessly intensify targeting victims. I’ve written about this extensively, including how scams are the most prevalent and damaging crimes in the UK and represent a national security threat. I and many of Tide's senior leaders have spoken to many key stakeholders in the City of London expressing why it is crucial to also tackle the problem of fraud at source rather than mandating all responsibilities onto payment service providers. We also welcome the commitment in the National Payments Vision to upgrading to the latest messaging standards for payments systems and the importance of interoperability between different systems, both domestically and internationally. We would strongly recommend the Government works to incorporate ISO 20022 and other enhancements into the UK’s Faster Payments System.

114

4 Comments

A quick, but substantive response from the Financial Conduct Authority to the UK House of Lords FSRC. Media characterises as "Doubling Down" & it does once again flag the questions as to the efficacy of governance in the UK under FRF/SRF. FCA notes: "We have engaged extensively with stakeholders over the course of this consultation and have received much constructive feedback,.." which is somewhat unlikely from this trade association viewpoint. Recalling the questions from Lord Forsyth of Drumlean: 1) How many investigations into a) firms & b) individuals are launched on average per year? How many are currently underway? - FCA notes that last year 15 investigations were opened into regulated firms of which 4 are listed, of which they flag LME. As of 31 March 2024, we had a total of 500 investigations underway, broken down as 336 investigations into individuals, and 164 investigations into firms. 2) Of closed investigations, what percentage in each category resulted in an adverse finding leading to the FCA taking enforcement action? - Of 153 closed investigations last year: 19% of investigations that were closed (28), were closed with enforcement action having been taken; 67% of investigations that were closed (104), were closed with no further action; and 14% of investigations that were closed (21), were closed with some other form of action having been taken. 3) How long, on average, does an investigation take from launch to closure? - investigations closed in 23/24 took an average of 43 months (almost 4 years) from the decision to open an enforcement investigation to closure with those leading to action taking c. a year longer than the average. 4) Do you have plans either to reduce the number of investigations or to speed them up? If so, how? What are your targets for each of these? - FCA doesn't answer this but cites 4 contributory factors: cooperation; complexity; volume of data; & disputation. 5) What led the FCA to make these proposals? Were they based on any particular representations? If so, from whom? - FCA adds a section on "Why have we made these proposals" - and cites the HoL and the current Chancellor as protagonists. Evidently, no one else in the industry has asked. 6) What consideration have you given to including an appeal mechanism, whereby firms or individuals under investigation can challenge your decision to publicise the investigation before you do so? - FCA notes none. Rather signposts towards a judicial review or an injunction which rather defeats the point of anonymity. 7) What consideration have you given to thematic, rather than individual, disclosure, in order to meet the public interest benefits of disclosure that you cite? - FCA cites their reliance on the Public Interest Test via their opinion that thematic disclosure is no alternative to factual and measured disclosure of individual investigations. (4 more questions were posed but not really answered because of no CBA or Impact Assessment)

11

The lack of real-time controls... https://lnkd.in/e-7jcB5C What's most revealing to me is this line "Because most were intraday trades this had not been detected straightaway, the person added.". If the cadence of your control systems fails to match the cadence of your trading then you're exposed to significant risk. This is not just about the controls being real-time, it's about the data being real-time too. Are organisations equipped with real-time distribution of the data that underpins these controls? The answer is all too often "No". So by the time the data is available, by the time the control eventually runs, the trade is already closed out and the organisation is often none-the-wiser to the intraday risk they were exposed to. T+1 will no doubt expose similar issues and as AI based decision making becomes more prevalent the lack of realtime data to underpin the AI models will cause further issues. At Gresham we firmly believe that If you're not upgrading your data game now, you're signing your own market death warrant.

16

The reliably interesting Joachim Klement covers MiFID2 in his excellent Substack today. For a suite of regulation that cost tens of billions to implement, I have never heard one positive thing said about MiFID2. Unfortunately, Joachim doesn't buck that trend and instead points out the research showing how it has led to increased costs and reduced liquidity. Perhaps someone can explain how MiFID has improved my life. https://lnkd.in/dTVUKZqb

5

Britain's finance watchdog sets out plan to implement crypto regulation regime by 2026 https://buff.ly/3Z1ZAMY Britain's financial regulatory authority has unveiled a strategic plan to establish a comprehensive cryptocurrency regulation framework by 2026. This initiative aims to provide clarity and security for digital asset transactions, ensuring consumer protection and market integrity. The move aligns with global trends as nations seek to regulate the burgeoning crypto sector to prevent fraud and enhance transparency. Stakeholders anticipate that this regulatory regime will include guidelines on the legal status of cryptocurrencies, compliance obligations, and enforcement measures. #CryptoRegulation #FinancialSecurity

10

The FCA is getting too authoritarian. If the FCA believes in transparency then why don’t Financial Conduct Authority executives publish all of their investments and historic investigations into FCA staff? The Met Police policed itself and look how many scandals there are. Can we trust the FCA to police itself? I don’t think we can. How do we know FCA staff aren’t front running investigations? Shorting companies they are about to punish or fine. Maybe these questions need to be asked. https://lnkd.in/eqibJvZC.

1

Sarron Futures – Yes Sarron Futures! Lots of market chatter about yesterday’s sell in front June. With an open interest increase of 2259 lots I’m not sure what that indicates – thoughts welcome. Potential fat finger? Curious to know if any else struggles with the post libor contract names, too many S’s.. Sofr, Sonia, Sarron or SFR, SFI, SSY - execution risk right there imho! If you trade Sarron please drop me a Bloomberg, I’m working on something that I hope will improve trading and liquidity for all participants. #markets #futures #ice #icestirs

14

2 Comments

It's always a pleasure to discuss #FixedIncome with Rob Hall and PGIM. In the second of our Sales Meets Selector series we discuss Money Markets and alternative homes for liquidity. Many thanks to William Robins and Citywire Selector for facilitating the conversation. #SalesandMarketing #Distribution #MoneyMarkets #AssetManagement #InvestmentManagement ________ Ring the 🔔 on my profile page to see when I post

10

T+1 unintended huge benefit ISITC EUROPE CIC is a member of the T+1 UK Technical task force and since early in January. We have been actively participating in the terrific work of people representing firms across capital markets. Well over 400 people from business diverse backgrounds all sharing knowledge and learning along the way. It has been inspiring to see. T+1 and probably T+0 in the not too distant future has been a catalyst for increasing industry knowledge of industry processes. You cant make this scale of change without understanding how the industry works. What people call the plumbing! Its been a huge undertaking and to be honest in February i had my doubts if the outcome of a report of recommendations in September was achievable. Herding cats comes to mind! To my mind there are two main reasons why mu doubts has been placated. The first is Andrew Douglas Chairmanship. I doubted he could achieve what he has so far achieved. He has been organized in thought and deed and been able to steer the T+1 Task Force ship towards calmer waters. A few rapids are ahead to complete the journey at the September report. I now have no doubt this will be achieved. I predict a gong of some kind is on its way! The second is KPMG US who took over as secretary after several months of doubt by me and got the project in order and become a staunch allie to Andrew. No gong but deep industry thanks will be there reward. Back to my point! The FS industry has become a series of verticals over decades. We lost across industry experts along the way. People have not understood industry post trade processes. T+1 has tipped the verticals to horizontal and people have learned about how the post trade works from different perspectives. Their careers will benefit as a result. There is a huge mountain of work to be done in the UK and EU to meet T+1 and now people realize just how complicated the capital markets is. Now people will be able to become evangelists of the capital markets to change. We believe the traditional capital markets are in transition to digital. ISITC Europe brings different people from across the industry together to learn and share knowledge. If your interested in joining us on the transition to digital capital markets you can by going to our website

5

Zilch Closes £100M Securitisation Debt Deal Led by Deutsche Bank Read the full story here: 👇  https://lnkd.in/ezzEz-xr #bnpl #fundraising #fintech #payments #fintechboostup

5

1 Comment

UK Gilt Market: Déjà Vu from the 2022 Crisis? 📉💷 The UK gilt market is under intense pressure again, echoing the turmoil seen during the 2022 LDI crisis. Following the recent budget announcement by Chancellor Rachel Reeves, the scale of additional borrowing has pushed the 10-year gilt yields to 4.45%, nearing the peak levels last witnessed in the aftermath of Liz Truss’s infamous mini-Budget. Investors are concerned that Labour’s “tax, borrow, and spend” approach could require even more gilt issuance in the coming months, putting pressure on bond markets. The increased borrowing raises questions about the UK’s fiscal sustainability, with potential long-term effects on interest rates, inflation, and investor confidence. As the markets adjust, memories of 2022’s LDI-driven gilt collapse serve as a stark reminder of the risks inherent in fiscal policy shifts of this scale. #UKEconomy #GiltMarket #BondYields #Investing #FiscalPolicy

8

The entry deadline for the LGC Investment Awards has been extended to midnight 26 July. That gives you an extra 3 weeks to perfect your current entries, and/or enter more categories! Taking place at lunchtime on 29 November, at the Waldorf Hilton, London, the LGC Investment Awards will recognise excellence across the Local Government Pension Scheme community. https://lnkd.in/e99NcfcT <<<<Don't miss out on the opportunity to gain recognition for the excellence delivered by you and your team>>>> To enter, you only have to tell us in up to 1,000 words why you should be a winner, and you can enter as many categories as you like. LGPS Categories - Pool of the Year - Fund of the Year (small) - Fund of the Year (large) - ESG Innovation - Innovation in Investment - Innovation in Administration - Rising Star - Outstanding Individual Contribution Service Provider Categories - Fund Manager of the Year - Lawyer of the Year - Consultant/Actuary of the Year - Private Markets Manager - Sustainability Manager - Impact Manager - Rising Star - Outstanding Individual Contribution View the criteria for entering here https://lnkd.in/e2pUaV52 Register using the link below today in seconds and submit by midnight on Friday 26 July. https://lnkd.in/eVrH5kzi If you need any help with your entry or for any further information please call Kieran McDougall on 020 3953 2019 or email him at [email protected]. #Pensionfunds #Pensionfund #LGPS #Localgov #LGA #Investment #Investments #Pensions #Solace #Localgovernment #Localgovernmentpensionscheme #Publicsector #CIPFA #Pension #BordertoCoastPensionsPartnership #Assetmanagement #Councilchiefexecutives #CouncilDirectorsofFinance #LondonCIV #Localpensionspartnership #LGPScentral #Brunelpensionpartenrship #Northernpool #Walespensionpartnership #Access #Netzero #Infrastructure #Investing #Councils #TCFD #NIESR #Pooling #Fundmanagement #Fundmanager #ESG #Actuaries #Sustainability #Actuaries

1

Oh no! You made a mistake in your AIFMD report! 🤦 As Fund Managers, we’ve all been there. It’s no fun getting reprimanded by the Regulator. ❌Don’t beat yourself up about it too much, because the AIFMD Annex IV reporting guidelines are so complex that it’s easy to slip up. However… ✅Do make sure you learn from this, because you want to avoid these errors next time. The last thing you want is the Commission thinking your organization is not on top of its game. Here are some tips for what you can do better moving forward: Instead of collecting data from different sources at the last minute, create a system to organize your data so you have everything in one place ahead of time. Develop a detailed process for your reporting obligation with a designated responsible person, and document it so the responsibility can be easily transferred to a different person when necessary. Use supporting applications or service providers to make everything even faster and easier. Why stress over complex reporting when you can simplify it with these simple steps? Let's keep things smooth, accurate, and stress-free. Plus, you remain in the good graces of the Regulator! #aimfd #regulatoryreporting #aifmdannexiv #ALFI

22

This is great solution from VouchedFor as this is a significant issue for firms trying to evidence compliance with the #consumerduty https://lnkd.in/e-uavExA

1