FCA publishes information for firms on COVID-19 response

Broadly, the regulator has reiterated its expectation that firms take reasonable steps to ensure they are prepared to meet the challenges Coronavirus could pose to customer and staff

18 March 2020

This article was written by Natalie Lim & Anna Davis.

The FCA has published guidance for firms on coronavirus (COVID-19) in a statement of 17 March. This includes:

  • Providing strong support and service to customers
  • Being clear and transparent and providing support as consumers and small businesses face challenges
  • Managing financial resilience and actively managing their liquidity
  • Reporting to the FCA immediately if it appears that the firm will be in difficulty. 

In addition, the FCA has provided information on specific areas, including:

Issue

FCA guidance

1

Regulatory change

The FCA is reviewing its work plans with a view to delaying or postponing non-critical activities relating to consumer protection and market integrity in the short term, to allow firms to focus on supporting their customers. It has also implemented a number of actions, including:

  • Extending deadlines for open consultation papers and Calls for Input (see point 7 below) and rescheduling other planned work (see point 8 below).
  • Scaled back programme of routine business interactions, so the FCA will only contact firms on business critical requests and responses to the current situation.
  • Small regulatory changes which support consumers (especially those most vulnerable) or where major long-term programmes would be disrupted will continue. 

2

Impact on consumers

The FCA has identified the following ways in which firms can manage the impact on consumers:

Flexibility in FCA rules

Firms are reminded that FCA rules provide flexibility and that such flexibility should be used to support consumers, bearing in mind their individual circumstances. Examples include waiving ISA fees and allowing customers to end their term deposits early to enable access to cash. 

New initiatives

The FCA welcomes firms taking initiatives beyond standard business practices, although firms contemplating this should notify the FCA so that it can consider the impacts and offer support as appropriate.

Customer complaints

Firms are still expected to deal with complaints promptly (or to notify the FCA if they are unable to do so). This means firms should aim to resolve any complaint within eight weeks, with a shortened timeframe of 15 days for payment firms. Where they are unable to do so, firms should write to the customer setting out their reasons for such. 

3

Access to cash

Regulator actions

The FCA, Bank of England, and the Payment Services Regulator are working together to understand problems faced by consumers in accessing cash.

Cash withdrawals and e-money transactions

The FCA acknowledges that UK firms have taken steps to ensure consumers have access to cash, such as increasing cash machine withdrawal limits. The regulator further states that it is confident that electronic payment providers have capacity to cope with the potential changes in transaction figures.

Access to banking services

Recognising that an increased number of customers may use online or phone banking services (in some cases for the first time), the FCA states that firms should continue to help vulnerable consumers access banking services, either online or via phone. 

4

Insurance

Travel Insurance

Firms should publish information relating to the scope of customers’ cover and any exemptions on their websites in a clear, concise way and ensure that customers have access to call centres. 

Health insurance

The FCA expects firms to make clear any time period restrictions when consumers take out a new policy.

5

Operational resilience

Business continuity

The FCA expects all firms to have tested contingency plans in place, and the regulator is actively reviewing that contingency plans of a wide range of firms. This includes:

  • Firms’ assessments of operational risks;
  • Firms’ ability to continue to operate effectively; and
  • The steps they are taking to serve and support customers.

Regulatory obligations

Firms should take all reasonable steps to meet regulatory obligations aimed at protecting consumers and maintaining market integrity. For example, if a firm has to close a call centre, it should establish appropriate systems and controls to ensure it maintains appropriate records.

The FCA’s consultation paper sets out further information on operational resilience matters that firms should be considering. 

6

Market trading and reporting

As firms are moving to alternative working arrangements, they must consider the broader control environment in these new circumstances.

Obligation to record voice communications

Firms should continue to comply with their obligation to record calls, to the extent possible. Where firms are unable to record calls, they should notify the FCA and consider actions to mitigate outstanding risks, such as enhanced monitoring or retrospective review after the situation has been resolved.

Submission of regulatory data

Where firms experience difficulties in submitting their regulatory data, the FCA expects them to maintain appropriate records throughout the period and submit the data as soon as possible. Firms should not unnecessarily delay submissions and contact the FCA as soon as possible if they have concerns.

Prevention of market abuse

Firms should continue to take all measures to prevent market abuse risks, including enhanced monitoring and retrospective review. The FCA will continue to monitor for market abuse and take action, if necessary.

7

Consultation Papers and Calls for Input closure dates extended to 1 October 2020

The FCA has decided to delay closure dates for the following published Consultation Papers:

  • CP20/4 Quarterly Consultation No 27
  • CP19/32 Building operational resilience: Impact tolerances for important business services
  • CP20/1: Introducing a Single Easy Access Rate for cash savings
  • CP20/3: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations
  • CP20/5: Consultation paper on ETF Listing: Premium to Standard Listing

and the following Calls for Input:

  • Open Finance
  • Accessing and using wholesale data

Closure dates for the above will be extended to 1 October 2020. 

8

Delays to publications and other activity

The following publications, originally due before end of June 2020, will now be delayed:

  • Joint PRA FCA work to develop industry led guidance on how to integrate climate related risks into business decision making across the FS sector
  • Motor Finance PS
  • Consultation Paper on mortgage switching
  • Vulnerability Guidance & Vulnerability Research
  • Options to change the FCA’s regulatory framework following their Duty of Care Feedback Statement
  • Consumer Credit Act (CCA) review
  • Credit Information Market Study – Interim Report
  • GI Pricing Final report and Consultation Paper on remedies. 

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