Opinion and Comment

MIFID II & GDPR Update

MIFID II is the latest re-incarnation of European-wide legislation aimed at increasing transparency in markets and providing improved client protection. It becomes effective on January 3rd, 2018. The main areas in which clients will see a change in the way that they invest, and how Holden & Partners addresses these issues are as follows:

  • Record of conversations – whenever your adviser has a conversation with you regarding your investments or financial planning strategy, a recording of that conversation will be made and retained.
  • Transaction reporting – financial planning firms will be required to make a report of all transactions made by clients that fall within the scope of the new legislation. To do this all investors will need a Legal Entity Identifier (LEI).
    For individuals, this will normally be a National Insurance Number (NINO). Where, for any reason, a NINO is not available, there are prescribed alternatives that can be used. Should it be necessary, Holden & Partners may contact clients regarding any further information that is needed to generate a personal LEI. Any clients who are not contacted may assume that no further information is needed.
    For trusts, companies, pension funds, charities, or unincorporated bodies, clients will need to obtain a LEI from the London Stock Exchange. Certain clients may have already received communication from a product provider, or obtained a LEI but, regardless, Holden & Partners will be contacting all clients individually to ensure that they such an identifier before January 2018 and to offer assistance to obtain it, should it be needed.

General Data Protection Regulations (GDPR) is a replacement for the Data Protection Act, which will become effective on May 25th 2018. Its purpose is to strengthen control over firms such as Holden & Partners who hold client personal data. Broadly speaking this means that:

  • Holden & Partners will require client consent to hold personal data in all circumstances, other than when there is a regulatory requirement for the firm to do so.
  • Clients will have the right to obtain copies of their personal data from Holden & Partners without charge.

Consequently, clients should expect to be contacted in early 2018 in order to obtain consent to hold their personal data.


Colin Sears
Compliance Manager

Market Commentary H1 2017

The first half of 2017 continued in a similar vein to the latter stages of 2016; an extremely supportive period for markets in which numerous global equity indices reached all-time highs. Investors witnessed robust gains in Q1 especially, driven by a raft of positive economic data and the perception of a stronger global recovery. Further advancement was seen in Q2, although movements in the latter stages of the period became more nuanced as investors distinguished between improving corporate earnings and economic data in Europe, and a slight disappointment in expectations in the USA. In contrast to recent years, political and economic surprises were not accompanied by an increase in market volatility – in fact, the VIX index (measuring the volatility of the US equity market) reached its lowest level since 1993, perhaps suggesting that investors are now focusing more heavily on underlying economic growth than the instability created by specific events.

2017’s pro-equity environment started with President Trump’s inauguration in January, as markets were buoyed by the administration’s plans to cut taxes, reduce the regulatory burden on companies, and increase infrastructure spending, alongside the expectation of higher GDP growth and inflation. Nonetheless, the so-called ‘reflation’ trade started to lose momentum within a few months as little progress was made on implementing the reform agenda, with the failure to pass revisions to healthcare legislation in March demonstrating Trump’s inability to deliver on many of his policies. With this came the realisation that a large boost to economic growth was unlikely, and the subsequent unwinding of the rally in value-orientated stocks which had surged since the election result. That being said, equity valuations continued to rise on the back of positive economic data, although this became softer in Q2 as several leading indicators disappointed. The Federal Reserve (Fed) looked through low inflation readings to further tighten policy with a 0.25% interest rate rise in June, whilst the dollar weakened due to a lack of conviction over the success of fiscal expansion and the expectation of other central banks around the world withdrawing monetary stimulus.

Who holds the ‘Trump Card’ on Climate Change?

On the subject of climate change, it appears President Trump has started his administration the way he means to go on. From the wholesale denouncement of global warming as a ‘hoax,’ to the appointment of environmental naysayers Scott Pruitt and Rick Perry as head of the Environmental Protection Agency (EPA) and Department of Energy respectively, his presidency looks set to be characterised by an attempted rejection of science and mistrust of all those with climate-related expertise. To the extent that climate change deniers support Trump’s agenda, including the backing of fossil fuel generation, he will continue to promote their dissenting voices.

Undoubtedly, this is a development that will preoccupy the minds of investors, not least those with an emphasis on environmental, sustainable, and thematic (EST) investment within their portfolios. It is all the more concerning given the recent conclusion from the UK Met Office and NASA that sixteen of seventeen hottest years on record have occurred since the year 2000, and the World Economic Forum (WEF) declaration that climate change is the one of the most impactful risks currently facing our planet. Yet, despite the grave warnings from various authoritative bodies, Trump is in the midst of repealing many of his predecessor’s policies on the subject, including the ‘Clean Power Plan’ (CPP), the blueprint by which the US intended to meet its wide-ranging commitments under the 2015 Paris Climate Change Agreement.

Perspective on Donald Trump

Politically Correct Investment Strategies

Both written and unwritten constitutions are under threat with the pillars supporting them under attack, as populist forces gather, chipping or pulling apart conventions and traditions embedded across Western democracies. Looking back at periods of calm, today’s investors are being challenged in a way unimaginable a decade or so ago.