On 17 March 2020, the FCA published a new webpage containing information for firms regarding the COVID 19 outbreak.
Key points include:
- the FCA is in regular contact with firms to assess their current position, and expects firms to be taking reasonable steps to ensure they are prepared to meet the challenges coronavirus could pose to customers and staff, particularly through their business continuity plans;
- the FCA expects firms to provide strong support and service to customers during this period. They should be clear and transparent and provide support as consumers and small businesses face challenges at this time;
- the FCA expects firms to manage their financial resilience and actively manage their liquidity. Firms should report to the FCA immediately if they believe they will be in difficulty;
- the FCA is reviewing its work plans so that it can delay or postpone activity which is not critical to protecting consumers and market integrity in the short-term. This will allow firms to focus on supporting their customers during this difficult period. One of the immediate actions the FCA is taking is to extend the closing date for responses to its open consultation papers and Calls for Input until 1 October 2020 and rescheduling most other planned work;
- the FCA still expects firms to deal with complaints promptly. However, where the outbreak prevents this firms should contact the FCA; the FCA understands the pressures firms will be under. Firms are reminded that they should aim to resolve any complaint within 8 weeks (15 days for payments firms). If they cannot, they should write to the customer explaining why they have not met the deadline;
- the FCA will be discussing the position with the mortgages industry and updating approaches mortgage providers may take to assisting their customers in the coming days;
- in relation to unsecured debt products, the FCA wants firms to show greater flexibility to customers in persistent credit card debt. Under FCA rules, firms are required to take a series of escalating steps to help customers who are making low repayments over a long period. After 36 months of someone being in persistent debt the provider must offer options to help repay the debt more quickly. If customers do not respond within a period set by the firm the card must be suspended. Given the challenges facing many customers at present the FCA thinks they should be given more time, until 1 October 2020, to respond to firms’ communications. This means that firms would not be obliged by FCA rules to suspend the cards of non-responders before then. This applies both to those who have already received communications from their provider and those that are yet to receive them. The FCA will be in touch with firms shortly to confirm details of this proposal.
In terms of operational resilience the FCA states:
“We expect all firms to have contingency plans to deal with major events and that the plans have been tested. Alongside the Bank we are actively reviewing the contingency plans of a wide range of firms. This includes firms’ assessments of operational risks, the ability of firms to continue to operate effectively and the steps firms are taking to serve and support their customers.
Firms should take all reasonable steps to meet the regulatory obligations which are in place to protect their consumers and maintain market integrity. For example, if a firm has to close a call centre – requiring staff to work from other locations (including their homes) – the firm should establish appropriate systems and controls to ensure it maintains appropriate records. Our rules are not specific in respect of call recording in such situations.
We will continue proactively discussing with firms and trade associations the issues they are facing, and we will be continuing our active dialogue with them in the coming days and weeks.”
In terms of market trading and reporting the FCA states:
“As firms are moving to alternative sites and working from home arrangements, they must consider the broader control environment in these new circumstances.
Firms should continue to record calls, but we accept that some scenarios may emerge where this is not possible. Firms should make us aware if they are unable to meet these requirements. We expect firms to consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice communications. This could include enhanced monitoring, or retrospective review once the situation has been resolved.
Firms may experience difficulties in submitting their regulatory data, in which case we expect them to maintain appropriate records during this period and submit the data as soon as possible. Firms should not unnecessarily delay these submissions. If firms have concerns, they should contact us as soon as possible.
Firms should continue to take all steps to prevent market abuse risks. This could include enhanced monitoring, or retrospective reviews. We will continue to monitor for market abuse and, if necessary, take action.”