With the on-going need for firms to continue to comply and compete, it’s worth focusing on the FCA measures and strategy taken to gain insight into what measures firms need to apply during these trying times:
Operational resilience (we cover this in our next live webinar Thursday 9th April 14:00) is a key focus for the regulator and sits as one of the 8 main areas for regulation in its 19/20 business plan. Saying that it wants ‘firms to continue operating during this challenging period’ the FCA confirmed it intends to ‘provide flexibility to regulated firms to ensure this’. Its expectations cover:
- Firms that have been set capital and liquidity buffers should use them to support the continuation of the firm’s activities.
- Firms should plan ahead and ensure the sound management of their financial resources. This might include using government schemes designed to help firms through this period to meet debts as they fall due.
- If a firm needs to exit the market, planning should consider how this can be done in an orderly way while taking steps to reduce the harm to consumers and the markets.
The FCA do not require a single senior manager responsible for coronavirus response.
- SMF24 operational resilience comes into focus
- SMF1 or most relevant staff member need to take responsibilities for key workers
Dear CEO letter:
Oh yes we have another one, but a good one! Here the FCA want to address some long overdue issues some of which make complete sense for the retail investment advice sector;
- Flexibility across client identify verification;
- Accept scanned documents (PDFs)
- Accept client selfies or videos (Social media eat your heart out) We would add linked in profile to verify professional status
- Due diligence on ‘other’s e.g. bank account provider, agreements to access data
- Use commercial providers
- Additional data to triangulate evidence such as IP addresses, phone numbers
- Verification of email/ physical address via electron codes
- Seek additional verification once self-isolation measures lifted
- Flexibility over 10% depreciation notification (until end September) No action taken:
- If firm has issues at least one notification within a current reporting period
- If a firm provides general updates (which firms doesn’t?)
- If a firm decides to stop reporting to professional clients only
So plenty of good stuff, firm’s will really benefit from such relaxation of measures but should ensure they’ve got their finger on the governance, risk and compliance pulse.
...Live Long and Prosper...Keep well and Healthy