November Admin Meeting – ESMA Requirements 1, 5 - 7

ESMA Requirements Understand the key characteristics, risk and features of Stakeholder, Personal and Self Invested Pensions products plus Investment Trust Securities/ Savings Schemes, including transaction costs and tax implications. Understand the impact of economic figures, national/regional/global events and on the value of investment products on which you provide information. Understand the difference between past performance and future performance scenarios as well as the limits of predictive forecasting. Understand issues relating to market abuse. Re: anti-money laundering – refer to centralised AML training.

Retail Investment Products Stakeholder Pension - Max 1.5% pa, reducing to 1% after 10 yrs. Simple investment choices and must have a default fund. No bid/offer spread, 100% allocation, no penalties and flexible contributions. Optional services at additional cost.

Retail Investment Products Personal Pension Similar to Stakeholder but wider investment choice. Unlike Stakeholder, charges are not capped. Higher contributions are sometimes required.

Retail Investment Products Self-Invested Personal Pension (SIPP) Access to a wide array of funds, including some unregulated areas. May allow assets to be held alongside the investments e.g. commercial property. May have charges in addition to those found within SHPPs and PPs. Contain a bank account through which all transactions take place.

Retail Investment Products Risk associated with all Pension Cannot access funds until age 55yrs currently but to increase – SRA minus 10yrs. Normal stockmarket risks apply. Need to plan access to funds, to avoid large reduction in value, if markets fall significantly close to retirement date.

Retail Investment Products Conventional Investment Trusts Constituted as a PLC and are traded on the stock exchange. They issue a fixed number of shares – closed end. Price depends on the value of its underlying holdings and demand for its shares. Unlike Unit Trusts they can borrow to buy shares (gearing). This can boost gains but accentuate losses. Split Capital Investment Trusts: Brief explanation.

Retail Investment Product Investment Trust Savings Plan A number of groups offer these plans and may be able to set up online. Usually from £50 per month. Single, joint or designated to a child. Basically buying the shares from the provider. Taxation as a Unit Trust/ OEIC.

Retail Investment Products Investment Trust Charges Annual Management Charge + Custodian =OCF. Dealing Charge: Witan £15 for lump sum – nil for savings. Stockbrokers differ. Witan Plan Charge £30.68 + VAT per annum. Stamp Duty 0.5%

ESMA 5 Understand the impact of economic figures/ regional/ global events and on the value of investment products on which you provide information.

ESMA 6 Understand the difference between past performance and future performance scenarios as well as the limits of predictive forecasting.

ESMA 7 Understand the issues relating to market abuse. NB - Money laundering training will continue to be centralised.

Summary Point 1- Understand the characteristics, features and risks of the types of personal pensions and Investment Trusts, lump sum/ regular. Point 5- Understand the impact of economic figures and events on the value of investments. Point 6 - Understand the differences between past and future performance scenarios as well as the limits of predictive forecasting. Point 7- Understand the issues relating to Market abuse.