RULES OF THE PERSONAL INVESTMENT MANAGEMENT AND FINANCIAL ADVICE ASSOCIATION (PIMFA)

Approved 10th May 2017

General

  1. The rules of the Association which were approved on 1 November 2016 were amended by the Directors pursuant to Article 15.01 of the Articles of Association with effect from 10th May 2017. These rules are the rules which apply from that date.
  2. Expressions defined in the Articles have the same meanings in these Rules. In the event of any conflict between these rules and the Articles of Association, the Articles prevail.
  3. For the purposes of the rules references to an “employee” shall be deemed to include any person who is a self-employed person connected with a member or applicant and any other person who in the opinion of the Directors should be treated as an employee of the member or applicant.

Membership

4. There shall be the following classes of membership of the Association:

a) Ordinary Membership

b) Associate Membership

c) Affiliate Membership

d) Other

5. An application for membership shall usually be made in writing in such form as the CEO, on behalf of the Directors, may prescribe.

 

Ordinary Membership

6. Ordinary Membership is open to persons who

a) are (i) wealth managers encompassing firms authorised, regulated or licensed to conduct investment business; or (ii) authorised, regulated or licensed financial advisers, planners, networks, and centrally organised networks of directly authorised firms; in each case in the UK, any European country, the Channel Islands, the Isle of Man and other appropriate offshore centres and where a significant aspect of their business includes the provision of services or facilities for dealing in, advising on, or managing investment in securities (to include EU defined financial instruments) and related products for or providing financial advice to non-institutional investors;

b) satisfy the directors that they are of good business standing, have such professional experience, competence and compliance with ethical standards so as to be (in the opinion of the Directors) suitable to be members of the Association and that they can meet and are committed to maintaining the stringent professional standards which the Directors deem necessary for membership of the Association;

c) satisfy the Directors as to such other matters as the Directors may for the time being stipulate with regard to eligibility for ordinary membership;

d) satisfy the Directors of their commitment to the Association’s principal object, namely to promote and support the development of the business, profession, and interests of investment managers, private banks, stockbrokers, MiFID-based financial intermediaries and financial advisers and planners, and of their clients, a significant aspect of whose business includes the provision of services or facilities for dealing in, advising on, or managing direct investment in securities and related products for or providing financial advice to non-institutional investors.

7. The categories of Ordinary membership are reviewed on an annual basis by the Directors.

Where an Ordinary member ceases to be eligible for one category of membership he shall automatically fall into such other category of membership for which he is eligible.

The Directors shall have over-riding discretion to determine how many categories of ordinary membership there shall be, the criteria of eligibility for each category of membership, and the rights, privileges and other benefits attaching to each class of membership.  The Directors shall have over-riding discretion to determine which category of ordinary membership should be assigned to any applicant or member.

The Directors shall have over-riding discretion to vary in any way membership categories, including allocating firms to categories using any determining factors as appropriate.

Associate Membership

8. Associate membership is open to persons who are not eligible for Ordinary membership but who satisfy the Directors:-

a) of their commitment to or involvement in the Association’s principal object, namely to promote, support and develop the business, profession and interests of wealth managers (including investment managers, private banks, stockbrokers, MiFID-based financial intermediaries and financial advisers and planners, and of their clients);

b) that they are of good business standing and have such professional experience, competence and compliance with ethical standards so as to be (in the opinion of the Directors) suitable to be associated with the Association;

c) that they do not themselves take part in the business of dealing in, advising on, or managing direct investment in securities and related products for or providing financial advice to non-institutional investors; and

d) satisfy the Directors as to such other matters as the Directors may, for the time being, stipulate with regard to eligibility for Associate membership.

9. Associate membership is a non-voting class of membership. Associate members will be entitled to receive notice of and to attend general meetings of the Association and any other of the events of the Association.  They may not vote and they may not stand for election as Directors of the Association.  However, they may supply co-opted members according to the discretion and composition of the Board.

10. The categories of Associate membership are reviewed on an annual basis by the Directors.

Affiliate Membership

11. Affiliate membership is open to other associations, organisations and entities who are not eligible for ordinary membership, nor who would normally be considered to be within the criteria of Associate membership but whose involvement with the Association will help promote its objects.

12. Affiliate membership is a non voting class of membership. Affiliate members are entitled to receive notice of and to attend general meetings of the Association, are not entitled to vote at such meetings nor may they (or the Directors or employees or partners of Affiliate members) stand for election as Directors of the Association.

Other Membership

13. Other membership is open to persons who are not eligible for Ordinary membership, Associate membership or Affiliate membership but in the opinion of the Directors are of good business standing and professional expertise and whose involvement with the Association will assist it in its objects. Such members cannot vote at meetings nor may their employees stand for election as directors of the Association.

Suspension and Termination of Membership

14. Where, in the opinion of the Directors, any member:-

a) is in contravention of the Articles or the Rules;

b) is guilty of conduct of bringing the Association or member into disrepute;

c) fails to make timely payment of a subscription or other sum payable to the Association;

d) ceases to satisfy the membership requirements of the Association applicable to his class of membership; or

e) the Directors otherwise believe that it would not be in the best interests of the Association for the member concerned to remain a member;

then the Directors may if they think fit, suspend or terminate the membership of the member in question.

15. Should the Directors consider there are grounds to justify the suspension or removal of a member from membership of the Association, they may in appropriate cases provide the member a proper opportunity to make representations, save that in cases which in the opinion of the Directors are of such seriousness and urgency as to warrant immediate suspension or removal from membership, the Directors may by summary notice suspend or remove a member from membership without prior opportunity of representation.

16. Where the Directors reject an application for membership of the Association, determine to suspend or remove a member from membership, or determine that a member has ceased to satisfy requirements of membership, notice thereof shall be given as soon as is reasonably practical to the applicant, member, or former member concerned. The Directors’ termination of a member shall be conclusive and they shall not be under any obligation to give reasons for their decision.

Meetings

17. Subject to Article 6.02 to 6.08, the votes a member (who is present in person or by proxy, or is present by a duly authorised representative not himself being a member) shall be entitled to exercise at any general meeting on a show of hands or a poll and the votes of any members cast in favour of any candidate for election to office as Director shall be multiplied by the appropriate votes as indicated by the Category of Membership.

The Board of Directors

18. The Board is the Board of Directors of the Association. All members of the Board of Directors are bound to represent the interests of the Association as a whole and not those of the member with whom they are associated.  No member may be represented on the Board of Directors by more than one person (being such a person as specified in Rule 19) unless one of them is a co-opted member of the Board.

19. Elected Directors must be employed by a member and must be the Chairman, Chief Executive, Senior Partner, Head of Private Client Business, or a person of equivalent high status of such member.

20. If the Board should establish a subsidiary board such as for example a European board, then these subsidiaries are Committees of the Association undertaking such duties as may be delegated to them by the Board.

Election of Directors to the Board

21. Nominations for Board membership will be co-ordinated at all times by the Chairman on behalf of the Board. Any names of potential Board members (put forward to the Chairman for possible inclusion in the papers for the next AGM) must be accompanied by sign-offs from two independent sponsoring members. Such sponsor nominations i.e. a proposer and a seconder, must be evidenced by the signatures of the CEOs of the two supporting members involved.

22. Optional ballot: Subject to the articles an election by ballot of members may be held on or before the same day in each year as the annual general meeting of the Association as the directors shall determine to elect persons to be members of the board of directors.  The directors may appoint an honorary scrutineer (who shall be an independent person) to supervise the conduct of such election and the counting of the votes cast in the election.  The company shall notify members of the date of the ballot, advising them of the number of vacancies to be filled, inviting nominations for candidates from members and shall issue nomination papers.  A candidate must be nominated and seconded by members, one of whom must be the member who employs the person concerned or of whom the person is an employee or partner.  Completed nomination papers, each accompanied by a synopsis (in no more words than the number prescribed by the company with the directors’ authority) of the candidate’s career, experience and qualifications and (where he is not a member) naming the member of or in which he is a director, employee or partner, must be received by the company no later than such date as the company (with the directors’ authority) may specify.

23. The company shall not less than 28 days before the date of the ballot circulate ballot papers (in such form as the directors shall determine) to the members together with particulars of the candidates, including such synopsis as they shall have submitted under these rules.

24. Unless the directors otherwise determine each member shall have one vote (and not more than one vote) for each vacancy, although they shall not be required to vote to fill all vacancies or any particular vacancy if they choose not to do so. To each member’s vote will be applied the appropriate multiplier according to the voting entitlements determined by the Category of Membership.

25. The individual in the company performing the co-ordination of this work will notify the chairman of the number of votes cast for each candidate and the candidates elected to office shall be those for whom the highest number of votes has been cast. The chairman shall notify the members of the results of the election to the members on or before the annual general meeting.

26. Candidates for Board membership either nominated via the Chairman or by ballot must be the chairman, chief executive, senior partner, head of private client business or a person of equivalent high status.

Fees and Annual Subscriptions

27. The rates of subscription payable each year shall be determined by the directors. If in the opinion of the directors (or, if there is a Membership Committee, the Membership Committee in exercise of the powers delegated to them) it is fair and equitable and in the interests of the Association as a whole any member or category of members may be required to pay an additional or supplemental subscription.

28. The membership year shall run from 1 June to 31 May each year. Membership will automatically be renewed each year, providing that the conditions of membership have been met.  Members must give a minimum of four months’ notice prior to the renewal date if they will be terminating their membership.

29. Unless either the CEO or as a Board the directors in their absolute discretion otherwise decide, the annual subscription fee shall be payable in full notwithstanding that a member may have joined the Association part way through a financial year. No member shall be entitled to any refund of its annual subscription (or entrance fee) during any period its membership is suspended or on its leaving the Association

30. If in any year subscriptions received are not sufficient to meet the expenses of the Association, the directors may determine supplemental rates of subscription to be paid in that year for the purpose of meeting expenses without the sanction of the majority of members in a general meeting limited to 35% of the rate of subscription set for the year by the directors. Subscriptions shall be payable at such times as shall be determined by the directors or the committee. They shall continue payable notwithstanding a member’s suspension.

31. Where a member is itself a member of a group of firms or companies under common ownership, its application for membership shall, unless the CEO or, with their approval, the directors in their absolute discretion otherwise decide, be deemed to be an application for membership on behalf of the entire group, and the annual subscription payable shall be calculated accordingly.

32. All overdue subscriptions shall attract interest at the rate of 2% per annum over the base lending rate from time to time of the Association’s bankers which shall accrue on a daily basis. No member whose subscription or other fees due to the Association are in arrears may vote on Association matters until payment in full of his annual subscription together with interest (if any).  Any member whose annual subscription is not paid may be suspended or removed from membership in accordance with Rule 14.

33. Without prejudice to the generality of these rules every member and every prospective member shall furnish to the Association such information as may be required by the Association to confirm the revenue turnover of the firm to enable it to satisfy itself as to the revenue turnover used to select a category of membership.

Information

34. Information provided by a member to the Association shall be kept confidential and, except as may be required by law or by the Articles or rules, shall not be disclosed by the Association without the member’s prior consent.

Liability

35. Liability of each member is limited to £10, being the amount that each member undertakes to contribute to the assets of the Association in the event of its being wound up while he is a member or within one year after he ceases to be a member (in accordance with the Articles).