On 13 May 2020, the FCA issued a statement on its website concerning firms’ handling of post and paper documents.
Key messages in the statement include:
- Where firms cannot comply with the requirements for post and paper-based processes the FCA expects them to notify it as soon as possible.
- Firms should try to ensure that all customers are not disadvantaged because of delays and make particular efforts to contact customers who do not use online services.
- The FCA understands that obligations for paper documents may be difficult to meet on usual timescales and it will show flexibility in how it will approach such issues, the FCA expects firms to send communications in a timely manner.
- Firms should demonstrate to the FCA any steps they have taken to mitigate the impact of non-compliance with postal and paper processes and then return to full compliance as soon as practical.
- The FCA expects firms to provide general updates on how it will treat incoming and outgoing post, and cheques, through its website and other public channels. Such communications should update customers on market conditions, explain how customers can check their financial statements (which may arrive late) and invite customers to contact the firm if they wish.
- For suitability assessments, the FCA recognises that face-to-face meetings are not possible. In such circumstances, it expects firms to use other methods to conduct a suitability assessment, such as phone calls and relevant due diligence checks online. The FCA would then expect a firm to send out the assessment without delay, whether online (for those customers that use online or email services) or by post.
- Firms should ask those who have sent instructions or cheques which have not been processed to contact the firm urgently by telephone or electronic means.
- Where a customer has made a payment by cheque which has not been processed, the FCA expects firms to consider the potential harm caused by not being able to cash the cheque on a case-by-case basis and ensure, where possible, they receive the services/cover they require.
- Where the uncashed cheque represents client money under the Client Assets Sourcebook (CASS) regime and the firm provides the service/cover without cashing the cheque, firms must consider whether proceeding in this way might breach CASS and expose other clients to the risk of a client money shortfall.
The FCA states that the above arrangements will be reviewed as the coronavirus pandemic develops. However, it adds that firms should revert to complying with the requirements as soon as reasonably practicable, and not wait on a further statement from it.