FINANCIAL CONDUCT AUTHORITY (FCA)
The FCA website contains a coronavirus page, with links relevant to firms and consumers.
FCA Information for Firms on Coronavirus (COVID-19) Response
Among other things, the FCA provided firms with guidance concerning regulatory changes and impact on consumers related to specific products and activity, including insurance, mortgages, unsecured debt, and access to cash.
From an operational perspective, the FCA instructed regulated firms to have contingency plans to deal with major events and meet regulatory obligations, and included a link to a recent consultation paper published jointly by the FCA and Bank of England concerning operational resilience matters that firms should consider. The FCA also gave regulatory relief and/or guidance concerning, market trading and reporting, delayed Consultation Papers and Calls for Input, and delays to publications and other activity.
On March 20, 2020, the FCA published expectations for general insurance firms during coronavirus (Covid-19) pandemic, which included general instructions to treat customers fairly.
That same day, it also issued guidance for mortgage lenders on treating customers fairly.
It also issued a statement on key workers in financial services.
On March 25, 2020 HM Treasury, the FCA and the Bank of England published an open letter to UK banks on lending.
That same day the FCA published, jointly with the Bank of England, a short statement on LIBOR transition plans.
On March 26, 2020, the FCA, the Financial Reporting Council (the UK’s accounting and audit regulator) and the Bank of England issued a joint statement on supporting capital markets. They put in place temporary relief on financial reporting for listed companies, under which firms may delay announcing results for 6 months from year-end without risking a suspension of their listing. They also published an associated Q&A Document.
The same day, the FCA released a short statement on financial resilience for solo-regulated firms.
On March 29, 2020, the FCA released a statement on work-related travel for Senior Managers.
On March 31, 2020 the FCA released guidance for firms providing investment services to retail investors.
On April 2, 2020 the FCA issued proposals for temporary financial relief for consumers with credit products. The consultation closes on April 6, 2020.
On April 3, 2020 the FCA and the Bank of England issued a statement of their expectations under the Senior Managers and Certification Regime for dual regulated firms.
On April 6, 2020 the FCA published its expectations for funds in the light of COVID-19.
On April 7, 2020, the FCA gave guidance to pension funds providers and advisers on COVD-19 related issues.
On April 8, 2020 the FCA released a number of primary market measures aimed at assisting listed companies.
On April 9, 2020 the FCA confirmed the temporary financial relief for consumer credit it had consulted on previously (consultation closed on April 6, 2020).
On April 15, 2020 the FCA published two Dear CEO Letters. The first was sent to CEOs of insurance firms and brokers insuring Small and Medium Sized Enterprises concerning business interruption insurance. The second was sent to banks lending to small businesses. These letters contained guidance from the FCA including its expectations concerning the treatment of small and medium sized enterprises suffering business interruptions and other financial hardships because of COVID-19. Both letters mentioned that the FCA had established a small business unit, headed by a member of its Senior Leadership Team, to consider small business issues.
On April 17, 2020, the FCA opened a short consultation on three linked pieces of guidance on the fair treatment of consumers for high cost credit and car finance.
On April 20, 2020, the FCA released its expectations for the use of wet signatures in light of Coronavirus restrictions.
On April 22, 2020, the FCA introduced new, longer deadlines for submitting a number of different regulatory returns.
On April 24, 2020 the FCA finalised its guidance on motor finance and high cost credit.
On April 27, 2020 the FCA released guidance concerning the interaction between its rules (including on financial crime), the Business Interruption Loan Scheme and the Bounce Back Loan Scheme.
On April 28, 2020 the FCA issued a Dear CEO letter to banks concerning fair treatment of corporate customers preparing to raise equity finance.
On April 30, 2020 the FCA issued a statement that it had extended the deadline for implantation of strong customer authorisation for e-commerce by 6 months to 14 March 2021.
On May 1, 2020 the FCA announced that it would seek to obtain a court declaration to resolve contractual uncertainty in business interruption insurance coverage due to concerns about the lack of clarity and certainty for customers making business interruption claims, and the basis on which some firms are making decisions in relation to claims.
On May 4, 2020 announced that it would pilot a “digital sandbox” to provide enhanced regulatory support to FinTech companies facing coronavirus-related challenges. The FCA described the following features that could be the foundations of its digital sandbox: access to high-quality data assets; a regulatory call-to-action; a collaboration platform; an observation deck; application programming interface (API) or vendor market place; and access to regulatory support. The FCA welcomed expressions of interest from regulated and unregulated firms, organizations, associations and individuals who would like to learn more, or discuss how they might contribute to developing the digital sandbox.
- The same day, the FCA announced amendments to the Coronavirus Business Interruption Loan Scheme (CBILS), which included the launch of the Bounce Back Loan Scheme (BBLS) to support small businesses. Yesterday, the BBLS formally launched and the FCA released an updated statement on its expectations of firms dealing with CBILS and BBLS. Among other things, the FCA reminded firms to manage risks of fraud and money laundering -- while balancing the need for fast and efficient release of funds -- by scrutinizing new customers with whom the firm had no prior dealings.
The UK Financial Conduct Authority released a statement concerning exemptions for certain financial services firms form the provisions of the Corporate Insolvency and Governance Bill. In March, Business Secretary Alok Sharma announced new insolvency and corporate governance measures to help businesses affected by the coronavirus pandemic, which were expected to be included in the Corporate Insolvency and Governance Bill. The FCA reported that it expects that these measures will not be available for certain banks, investment firms, insurers, payments and e-money institutions and market infrastructure bodies. Firms that safeguard client assets are also expected to be excluded from the company moratorium during the coronavirus period and temporary suspension of wrongful trading provisions.
On May 13, 2020 the FCA updated its page on LIBOR transition to note that it would resume full supervisory engagement with firms on this issue from June 1, 2020.
On May 14, 2020 the FCA confirmed a package of measures it previously consulted on, designed to encourage firms to assist consumers who may be in financial difficulty as a result of COVID-19.
On May 22, 2020 the FCA proposed to extend the mortgage payment deferment arrangements currently in place, allowing consumers who have not yet requested a payment holiday until October 31, 2020 to do so. The same day, the FCA launched a consultation on guidance for the payments sector which contains a number of proposals, including around safeguarding.
On May 26, 2020 the FCA published updated Q&A on delaying annual company accounts and half yearly reports.
On May 27, 2020 the FCA published Marketwatch 63, which sets out the FCA’s views on market related issues (including disclosure) during the COVID-19 pandemic. It also published Primary Market Bulletin No 28, setting out its views on a number of market-related COVID-19 issues. The same day, the FCA published a statement on training and competence requirements for employees of regulated firms. In this, the FCA noted that it expected firms to ensure their relevant individuals remained competent to carry out their work. But in exceptional COVID-19 related circumstances, the FCA noted it was willing to allow firms to defer Continuing Professional Development (CPD) to the following CPD year.
On June 1, 2020 the FCA released draft guidance for insurers who write business interruption policies on the fair treatment of consumers in the light of a test case which is to some before the UK courts. The guidance sets out the FCA’s expectations for insurers and insurance intermediaries when handling claims and complaints for business interruption policies during the test case brought by the FCA.
On June 2, 2020 the FCA confirmed the draft guidance issued on May 22 concerning fair treatment of consumers who have difficulties paying their residential mortgages.
On June 3, 2020 the FCA published finalized guidance for insurers on the assessment of product value during the pandemic. The guidance includes changes to clarify that firms: should consider the value of products where, due to the impact of COVID-19, there has been a material reduction in risk so that they are providing little or no utility to customers, and not just where claims are no longer possible; are not expected under this guidance to assess value on an individual customer level, but should consider our guidance on helping customers in temporary financial difficulty as a result of COVID-19; can assess the longer-term impacts of COVID-19 on their insurance products on an ongoing basis beyond the 6-month period the FCA has set out for product reviews resulting from this guidance. The guidance comes into immediate effect and may be revised if appropriate.
On June 4, 2020 the FCA published its expectations on banks, building societies, and credit unions on reinstating in-person services in a consistent way. After working closely with firms to help them consistently reinstating services for customers, the FCA expects that firms will prioritize several areas, including: continuing to ensure essential services are available for the most vulnerable customers and expand capacity where possible; proactively contact vulnerable customers to make sure they know about the services they offer for those self-isolating, and how they can contact their bank if they do not have access to online banking; where possible, and in line with relevant government guidelines, reinstating access to cash and essential services in local areas which have lost access to bank branches or cash during the crisis; where it is not possible to reinstate access, and in areas where a reduced service remains, ensuring that there is clear communication to customers through websites and physical signs at branches to signpost to alternatives, such as Post Office services.
Coronavirus (COVID-19): Support for Consumers
Consumer guidance included information concerning retail insurance products, and general guidance intended to ensure that customers had access to cash, were treated fairly, and were aware that insurance providers must consider the needs of consumers potentially affected by the pandemic. The FCA further provided guidance for consumers to avoid scams and fraudulent schemes related to COVID- 19.