New European Legislation


Lisa Hamer – Compliance Director

Forthcoming New Legislation – Markets in Financial Instruments Directive (MiFID)

MiFID is a wide-ranging piece of legislation from Europe, that seeks to promote a single market for transactions in financial instruments throughout Europe and also to address issues raised by the financial crisis. It is currently under review and the changes are due to be implemented from January 2018.

Many changes will occur ‘’behind the scenes’’ and clients will not see or feel any direct impact on the services they receive. However, the changes below will have a visible and direct impact on our clients.

1. Transaction Reporting
Transaction reporting in January 2018 will undergo a number of significant changes and, most notably, we must include details of the underlying beneficial owner of the assets in our dealing instructions.

This means that individuals and entities must have unique ‘’Identifiers’’ from January 2018 onwards.

  • The Identifier for individual beneficial owners will be the National Insurance Number in most cases and we shall contact any clients where we do not already hold this information.
  • The Identifier for entities (trusts, charities, companies etc.) will be a ‘’Legal Entity Identifier’’ (LEI) which will need to be applied for by the entity. In the UK, LEIs will be issued by the London Stock Exchange for which there is an initial and on-going annual maintenance charge. We are looking into this and will issue further information to our clients regarding how to apply for a LEI.

This requirement has a significant impact on our clients in that we will not be able to deal unless we have the required ‘’Identifier’’ for the beneficial owner of those assets.

2. Performance reporting
Another significant change is that investment reports will be issued on a quarterly basis, as a minimum. In addition to the quarterly reports, should the value of the portfolio fall by more than 10% during the reporting period, a further report must be issued at that time.

There are a number of ‘grey areas’ awaiting further clarification in connection with the 10% reporting requirement but it does mean that, from January 2018, clients will be receiving reports more frequently than now.

Avoiding Scams


Lisa Hamer – Compliance Director

Investment scams are becoming increasingly plausible with very smooth talking sales people, glossy brochures and sophisticated websites, making it difficult to tell them apart from genuine investment opportunities. However, there are a few things that individuals can do to spot a scam and avoid being taken in.

1. Reject cold calls
A cold call is usually unexpected from someone you don’t know about an investment opportunity. Some firms may disguise a cold call by sending you (or saying they have sent you) uninvited emails or promotional brochures, or by suggesting that they are calling in response to an expression of interest from you.

Cold calling by authorised firms is rarely, if at all, practiced today.

If you receive a cold call you should be very wary. If the call follows any of the following themes, you should be very cautious:

• Time limited offers – you must commit by a certain date to be eligible to invest, or to receive enhanced benefits or a discount.
• Fantastic returns – you are promised returns that are much better than you could get elsewhere.
• Little or no risk – the risks to your money are downplayed by the caller who advises you that the investment is safe or guaranteed or liquid if you decide to sell in the future.
• Legal jargon – the caller bombards you with legal and financial jargon.

The Regulatory Requirements for authorised firms prevent this kind of behavior with clients so if the call displays any of these characteristics it is extremely likely to be a scam.

2. Check the Financial Conduct Authority (FCA) register and warning list.
If you are undecided as to whether the firm calling you is genuine, the FCA maintains some very helpful information which can be easily accessed from their website www.fca.org.uk.

• The FCA warning list – this is a helpful tool on the FCA website that will take you through a few simple questions in order to see if the firm is on their list of unauthorised firms. You must have the name of the firm that called you in order to check this list.
• The FCA Register – this is a helpful tool on the FCA website where you can check the name of the firm that called you against the register of authorised firms

If the firm does appear on the FCA register of authorised firms, call it on the contact number provided on the FCA register to double check the call you have received purporting to be from them. Scammers can ‘’clone’’ firms by creating documents and websites that look like the real thing, but with different contact details.

Not all investment opportunities offered out of the blue will be scams, but you should be very wary, especially if they are unusual investments. If the firm is not authorised you will not be covered by the Financial Services Compensation Scheme.

If you are cold called by someone you do not know about an investment opportunity, the safest thing to do is hang up.

Find out more about investment scams and how to avoid them on the FCA’s website www.fca.org.uk