It is impossible to predict at this stage what impact the coronavirus will have on day-to-day staffing and on the availability of basic business facilities. Undoubtedly, it will impact firms to varying degrees and, within firms, the impact will also vary amongst departments and functions.
Consequently, senior management and compliance officers will be required to make judgments as to how available resources are allocated across a broad range of functions while, at the same time, bearing in mind the primary importance of protecting consumers and ensuring that services continue to be accessible to clients.
In addition, firms must also have regard to the duty of care they owe their employees and the government edict that only essential staff work from offices. The Financial Conduct Authority (FCA) is in the same position as firms. In managing their resources their primary focus at present is protecting consumers and ensuring that the banking sector is delivering on the various initiatives coming from government to assist business and consumers. In making judgements, firms should document – and stand ready to justify and evidence – the judgements they are making but, equally, they should not be expected to seek clearance from the FCA in respect of each and every issue.
It might therefore be helpful for FCA to give an indication of the factors that firms should consider in making judgments about how they prioritise their resources, although we appreciate that any steer from FCA in this respect would necessarily be both broad and generic. Now that we are ‘locked down’ for an indeterminate period, both the FCA and Her Majesty’s Treasury need to reinforce their assurances to the industry that they understand this may result in firms being unable to meet many of their regulatory obligations.
Pimfa is in regular contact with the FCA, the Treasury, other associations and stakeholders on Covid-19, as well as other issues, and we have instituted regular meetings with the FCA to deal with questions from our members on Covid-related issues. These meetings are being followed by a 30-minute live webinar each week, where I am providing a briefing to our members on the issues we have raised with the FCA and the feedback they have given. This is followed by a written briefing note for our firms.
In addition, two weeks ago we wrote to the FCA’s Christopher Woolard outlining the key issues and concerns regarding the impact of the virus on our firms and are pleased to see that many of the issues we raised are addressed in their recent ‘Dear CEO’ letter.
Temporary changes within the regulatory framework outlined in the letter include greater flexibility over client identification verification, supervisory flexibility over best execution until the end of June, a pause on the implementation of investment pathways and supervisory flexibility over 10% depreciation notifications until the end of September.
Further, the European Securities and Markets Authority (Esma), the European Insurance and Occupational Pensions Authority (EIOPA) and other bodies are helping by, for example, giving an extended grace period for reporting company accounts, all helping to reduce day-to-day pressure brought on by the prevailing situation.
This all goes to show how essential good communication is – these changes have been achieved by constant dialogue between firms, their representatives, regulators and government. More can be accomplished by maintaining this until brighter times arrive.
Keep safe and #stayconnected.
Ian Cornwall is director of regulation at the Personal Investment Management & Financial Advice Association (Pimfa)
