31 March 2020

This article was written by Anna Davis.

The Dear CEO Letter sets out the FCA’s approach to following issues in order to help firms:

  • Client identify verification needs to continue, but firms have flexibility within FCA rules; the FCA has provided some examples of the available flexibility such as accepting scanned documentation or asking customers to submit selfies.
  • Firms should continue to meet their obligations on client order handling. ESMA has also published additional guidance here. But the FCA will not take enforcement action where a firm does not publish RTS 27 or 28, provided they are published by 30 June.
  • FCA will not take enforcement action over the next 6 months where a firm does not make 10 per cent depreciation notifications provided it has issued at least one notification within a current reporting period, subsequently provides general updates, or chooses to cease providing 10 per cent depreciation reports for any professional clients.
  • The FCA has referred the forthcoming implementation deadlines for investment pathways and platform switching provisions to its Board to consider whether implementation should be delayed.
  • As regards financial resilience, the FCA has confirmed that government loans cannot be used to meet capital adequacy requirements as they do not meet the definition of capital.
If you have any questions about the above, please contact Anna Davis or your usual Burges Salmon contact.

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