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FCA to review firms’ plans on coronavirus

13 March 2020

Written by: Robert Adler, Commercial Director, SteelEye

Continued pressure on regulatory conformity

The Financial Conduct Authority (FCA) is reviewing financial and regulated firms' contingency plans to assess whether they are suitably prepared for the coronavirus outbreak and its effect on day-to-day operations and client services.

In an update on its website (FCA COVID-19 Update), the regulator said it is working closely with the financial services sector, including the Bank of England and HM Treasury, to ensure it is responding effectively to the coronavirus (COVID-19) outbreak. This includes reviewing the contingency plans of a wide range of firms to check for any operational risks on day-to-day business as well as businesses’ ability to continue to operate effectively.

"The FCA expects firms to take all reasonable steps to meet their regulatory obligations during this time."

The regulator is also looking at what steps have been taken by firms to support customers during this period. The FCA stated they expect firms to take all reasonable steps to meet their regulatory obligations: "We would expect firms to be able to enter orders and transactions promptly into the relevant systems, use recorded lines when trading and give staff access to the compliance support they need. If firms are able to meet these standards and undertake these activities from backup sites or with staff working from home, we have no objection to this.” The FCA is also working with firms to resolve any issues they may have and said it will keep its guidance under review as necessary.

The outgoing governor of the Bank of England, Mark Carney, has warned that the economic shock from the coronavirus outbreak could prove significant but expects any fallout to ultimately be temporary. He said the Bank was monitoring the potential impact of "confidence effects" on the market as a result of the outbreak and that The Bank will take all necessary steps to support the UK economy and financial system consistent with its statutory responsibilities.

"We are monitoring the situation closely across all our functions and ensuring all necessary contingency plans are in place."

Mark Carney, Outgoing Governor of the Bank of England

As health organisations and governments around the world work to contain the virus, businesses should be mindful of the various ways the virus may impact their operations and employees. The wide range of potential issues includes complications in transactions and contracts, incidents that trigger regulatory obligations, and personnel concerns stemming from illness or remote workforces.

 

Now is the time to act

Whilst we don’t yet know the full extent to which the coronavirus will impact us, I can offer the following considerations for those navigating coronavirus related regulatory and legal challenges.

The impact on financial firms’ regulatory obligations should not be ignored. The coronavirus outbreak, which has become a global concern, raises complex considerations for firms subject to the FCA's reporting and disclosures rules with employees working from home.

Make sure, as a regulated firm, you have the right technology in place to be able to function with a remote workforce whilst fully complying with the rules of the regulator. Can you carry out your due diligence while working from home? Can you monitor your trades and communications, comply with best execution and manage your MiFID II and EMIR reporting away from the office? If you can’t or don't know, then now is the time to review your solutions and strategies. Staying compliant has never been so important!

"Now is the time to review your solutions and strategies to make sure you can manage your regulatory obligations remotely."

SteelEye can help guide, prepare and advise financial firms on how to comply smarter and fully leverage their data to effectively manage their regulatory & compliance demands as required by the FCA, MiFID II, Dodd-Frank, GDPR and more.

If you’d like more details on trade and communication surveillance, regulatory reporting, best execution, record keeping, trade reconstruction, trade and order analytics and TCA for alternative investment, hedge fund, asset & wealth managers, brokers and private or investment banks, please contact me directly.

 

 


About Robert Adler: 

Robert Adler-portrait photoRobert has over 19 years of experience within the financial technology and software sector, delivering complex business and technology change programmes for asset managers, wealth managers, hedge funds and banks.

Robert has leveraged his cross product and front, middle to back office knowledge to deliver a range of projects for clients. These include IT deployments, cloud and telephony migrations, regulatory technology control remediation, trading systems solutions, equity business and technology reviews, assessment of IT & technology strategies, regulatory due diligence, wealth & portfolio management solutions and IT cost management reviews. He has also spoken on TV,  in panel discussions and in the media regarding IT, outsourcing, technology, financial regulatory & compliance subjects.