 Coronavirus (Covid-19)
The effects of Coronovirus are profound and are being felt by millions, both here in the UK and across the world.
In these exceptional circumstances that we are all operating in, our highest priority continues to be to act quickly where we can make a difference, particularly to those who are facing financial difficulties due to the pandemic. We also want to ensure that we provide the regulatory environment where firms like yours can concentrate on serving your customers.
With this in mind, over recent weeks we have announced a series of measures to support both consumers and businesses who hold insurance policies. This includes:
- seeking legal clarity on business interruption (BI) insurance to resolve doubt for businesses who are facing uncertainty on their claims
- proposed guidance setting out our expectations that insurance firms should look at whether their products still offer value to customers in the current situation
Yesterday, we also published guidance setting out our expectations that firms should help individual customers who may be finding it difficult to pay their insurance premiums or meet their premium finance payments as a result of coronavirus.
We recognise that such rapid changes aren’t always easy to keep up with. That’s why we have published a series of pages on our website for firms on coronavirus. This includes dedicated pages for firms on insurance and mortgages.
We’re also sending daily email updates on coronavirus news and publications and I encourage you to sign up to these to help keep you up to date.
Financial Services Regulatory Initiatives Forum launches Grid to help financial firms’ planning
The Financial Services Regulatory Initiatives Forum has published the Regulatory Initiatives Grid. The Forum comprises the major UK financial services authorities. The Grid is a 12-month forward look of major regulatory initiatives affecting the financial services sector. It will help firms understand – and plan for – the timing of the initiatives that may have a significant operational impact on them.
We want to make the Grid as useful as possible. If you have any feedback please send it to FSRIFSecretariat@fca.org.uk.
Financial crime systems and controls during coronavirus
We have set out our high-level expectations on the application of firms’ systems and controls for combatting and preventing financial crime during the ongoing pandemic. It focuses on the importance of remaining vigilant to new or emerging threats, while also recognising that firms may need to re-prioritise or delay some activities on a risk basis. We have also provided links to other statements relevant to firms’ financial crime arrangements, for example remote client identify and verification, and submission of regulatory returns.
Period to cover absent Senior Managers extended due to Coronavirus (Covid-19)
We have extended the maximum period firms can arrange cover for a Senior Manager without being approved, from 12 weeks to 36 weeks, in a consecutive 12-month period.
The modification by consent to rule SUP10.3.13R is available to all solo regulated firms and it provides flexibility in managing governance arrangements during the coronavirus pandemic. It can be used if, for example, a Senior Manager is absent because of coronavirus, or recruitment to replace a Senior Manager is delayed due to the pandemic. You may also as a precautionary measure, in advance of actually needing it.
Coronavirus updates
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Statement on the UK Coronavirus Business Interruption Loan Scheme (CBILS) and the new Bounce Back Loan Scheme (BBLS)
We have issued a statement on the application of the Consumer Credit Sourcebook, Senior Managers & Certification Regime and Financial Crime rules in respect of the Government support measures delivered through the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Schemes (BBLS).
Digital Sandbox Covid-19 pilot
We have updated our website to announce the Digital Sandbox Covid-19 pilot. Building on our approach to innovation, we are collaborating with key strategic partners and the industry to pilot a ‘digital sandbox’. This will provide enhanced regulatory support to innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic. We will be announcing the specific Use Cases the pilot will target and opening applications later in the Summer. In the meantime, we welcome expressions of interest from firms. In particular, we are keen to hear from firms or individuals who have an interest or specialism in data anonymisation or synthetic data generation. For further information please email digital.sandbox@fca.org.uk.
Statement on how firms should handle post and paper documents
We have issued our statement on how firms should handle post and paper documents. We continue to expect firms to comply with the requirements for post and paper-based processes (both incoming and outgoing). But we also understand that in the current circumstances some firms may not be able to comply fully with them. Where this is the case, we expect firms to notify us as soon as possible by emailing firm.queries@fca.org.uk.
Financial services exemptions in forthcoming Corporate Insolvency and Governance Bill
On 28 March 2020, Business Secretary Alok Sharma announced new insolvency and corporate governance measures to help businesses affected by the coronavirus (Covid-19) pandemic. These measures are expected to be included in the Corporate Insolvency and Governance Bill (Bill).
Specific provisions in the Bill are necessary for the financial services sector to protect consumers and financial stability. These will help to ensure that the UK’s existing special insolvency regimes for financial sector firms remain effective, and that financial market participants have the legal certainty so that financial markets function effectively.
For more information on the Bill and the exclusions in place for some financial services firms, please see our statement.
Firm handling of complaints during Coronavirus
We have published guidance on how firms should handle complaints during coronavirus. While we understand that firms’ capacity to handle complaints could be reduced as a result of the current circumstances, we have set out our expectations of firms to prioritise:
- paying promptly complainants who have been offered redress and accepted that offer
- the prompt and fair resolution of complaints from consumers who are likely to be vulnerable to harm if their complaint is not resolved promptly and fairly, and
- sending timely holding responses to those complainants where their complaints cannot be resolved promptly
Information security & financial crime
The exceptional circumstances introduced by coronavirus have caused firms to change their ways of working at pace. This is while cyber criminals are increasingly exploiting coronavirus related themes for their own gain. On 6 May we published some updates setting out our expectations on information security & financial crime systems and controls.
Accessing restricted savings
We have updated our coronavirus information page for firms, reminding them of their obligations to treat customers fairly when responding to requests for access to restricted savings products. During the coronavirus crisis, consumers may request access to these savings to pay for essential goods and services, particularly if they have experienced a loss of income.
Treating customers fairly does not mean firms must offer access to all customers, but they should consider the circumstances of each customer and the impact giving access would have. They should balance customer needs against other factors, such as managing prudential risk.
Digital Sandbox Covid-19 pilot
We have updated our website to announce the Digital Sandbox Covid-19 pilot. Building on our approach to innovation, we are collaborating with key strategic partners and the industry to pilot a ‘digital sandbox’. This will provide enhanced regulatory support to innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic. We will be announcing the specific Use Cases the pilot will target and opening applications later in the Summer. In the meantime, we welcome expressions of interest from firms. In particular, we are keen to hear from firms or individuals who have an interest or specialism in data anonymisation or synthetic data generation. For further information please email digital.sandbox@fca.org.uk.
Product value and Coronavirus
We have set out our expectations for insurers and insurance intermediaries to consider the value of their products in light of the exceptional circumstances arising out of coronavirus. The guidance is intended to highlight what we consider firms should be doing to identify any material issues that affect the value of their products, and their ability to deliver good customer outcomes, during this unprecedented time. Where firms identify any material issues they should consider the appropriate action to take. The guidance closes at 5pm today (15 May) and we will announce finalised guidance, subject to feedback soon.
Customers in temporary financial difficulty and Coronavirus
We have set out our expectations for firms when dealing with customers who may be experiencing temporary financial difficulty as a result of the coronavirus pandemic. The aim of the guidance is to prompt firms to help qualifying consumers, where possible, in order to:
- Minimise the impact of temporary financial distress.
- Ensure that customers continue to have insurance that meets their demands and needs.
Access to premises and Coronavirus
We have updated our expectations of firms on how firms treat customers who may not be able to access their premises as a result of Government restrictions on travel and the ongoing coronavirus situation. Where access is required as part of the terms of a policy, we expect insurers to take account of a customer’s temporary change in how they access those premises, and treat their customers fairly. We don’t expect insurers to void policies or reduce potential claims as a result. Customers should contact their insurer if they are concerned about being unable to access their property.
Business interruption (insuring SMEs)
We announced our intention to obtain a court declaration to resolve contractual uncertainty in business interruption (BI) insurance cover. This is due to continuing and widespread concerns about the lack of clarity and certainty for some customers making BI claims, and the basis on which some firms are making decisions in relation to claims. This is not intended to encompass all possible disputes, but resolve some key contractual uncertainties. This will assist both insurers and the insured. It will not determine how much is payable under individual policies, but will provide the basis for doing so.
Financial crime systems and controls during Coronavirus situation
We have set out our expectations on how firms should apply their systems and controls to combat and prevent financial crime during this crisis. It is important that firms remain vigilant to new types of fraud and amend their control environment where necessary to respond to new threats. We recognise that there may be operational challenges in relation to financial crime systems and controls, and while firms should not seek to address operational issues by changing their risk appetite, we understand that they may need to re-prioritise or reasonably delay some activities.
Digital Sandbox Covid-19 pilot
We have updated our website to announce the Digital Sandbox Covid-19 pilot. Building on our approach to innovation, we are collaborating with key strategic partners and the industry to pilot a ‘digital sandbox’. This will provide enhanced regulatory support to innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic. We will be announcing the specific Use Cases the pilot will target and opening applications later in the Summer. In the meantime, we welcome expressions of interest from firms. In particular, we are keen to hear from firms or individuals who have an interest or specialism in data anonymisation or synthetic data generation. For further information please email digital.sandbox@fca.org.uk.
Reporting under the Payment Accounts Regulations (SUP16.22): deadline extension
The deadline to complete Payment Accounts Regulations (PARs) submissions covering the reporting period 1 March 2018 to 29 February 2020 has been extended to 30 June 2020. In normal circumstances, we would expect to have received submissions from firms by 30 April, but the deadline has been extended to allow sufficient time for firms to submit.
If you did not offer payment accounts during the reporting window – 2018-2020 – you do not need to complete a submission. For reporting requirements and what you need to do, visit our website.
Digital Sandbox Covid-19 pilot
We have updated our website to announce the Digital Sandbox Covid-19 pilot. Building on our approach to innovation, we are collaborating with key strategic partners and the industry to pilot a ‘digital sandbox’. This will provide enhanced regulatory support to innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic. We will be announcing the specific Use Cases the pilot will target and opening applications later in the Summer. In the meantime, we welcome expressions of interest from firms. In particular, we are keen to hear from firms or individuals who have an interest or specialism in data anonymisation or synthetic data generation. For further information please email digital.sandbox@fca.org.uk.
Brexit
The UK left the EU on 31 January 2020 and entered a transition period, which is due to end on 31 December 2020. Find out what this means for firms and consumers on our Brexit pages.
Temporary Transitional Power (TTP)
The FCA has confirmed that after the transition period, we intend to apply the TTP on a broad basis and to the same areas previously communicated. We intend to grant transitional relief from the end of the transition period until 31 March 2022. There are specific areas where we will not grant transitional relief. In these areas, we continue to expect firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by the end of the transition period. For further information see here.
New Terms of Engagement between the FSCS and representatives
The Financial Services Compensation Scheme (FSCS) has published 'terms of engagement' for Claims Management Companies (CMCs) and solicitors here. This sets out expectations of how representatives, including CMCs, should interact with the FSCS and how the FSCS will communicate with representatives. CMCs will be asked to agree to the terms when logging onto the FSCS's online claims service.
CMCs Signing FSCS application forms on behalf of vulnerable customers during Covid-19
The Financial Services Compensation Scheme (FSCS) has published guidance on how CMCs can get signatures from customers for their claim summary form under the current Covid-19 conditions. It provides that CMCs can sign the application on behalf vulnerable/elderly customers provided the application is accompanied by written confirmation from the CMC covering the points set out in the FSCS communication here.
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