A round-up of the FCA’s latest Covid-19 updates for regulated firms

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A couple of weeks ago, we shared a summary of the Financial Conduct Authority’s updates on Covid-19.

With the Authority issuing regular statements for firms and their customers, we thought now would be a good time to summarise the latest updates.

The FCA has put out a number of updates over recent weeks:

  • On 1 April, the regulator encouraged savers to ‘stay calm and not rush financial decisions’. The advice came in the wake of hugely volatile investment markets, which saw massive falls as the pandemic began to impact economies worldwide.
  • On 2 April, the FCA proposed a range of targeted temporary measures covering the consumer credit industry. These were designed to support customers facing a financial impact from the coronavirus. Following a very brief consultation, these measures were confirmed on 9 April. The initial measures announced under this move see firms expected to:
    • offer a temporary payment freeze on loans and credit cards for up to three months for consumers negatively impacted by coronavirus
    • allow customers who are negatively impacted by coronavirus and who already have an arranged overdraft on their main personal current account, up to £500 charged at zero interest for three months
    • make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft pricing changes came into force
    • ensure consumers using any of these temporary payment freeze measures will not have their credit file affected

The FCA confirmed that products in scope comprised: guarantor loans, logbook loans, home collected credit, a loan issued by Community Development Finance Institution and some loans issued by credit unions, but only where these are regulated. The guidance also applies to firms which have acquired such loans.

All firms needed to comply with these measures by 14 April. The FCA announced its intention to keep the new measures ‘under review’. Further measures will follow.

Unveiling the measures, the FCA’s Christopher Woolard pointed out that:

'Customers should think carefully before making use of these measures and only do so if they need immediate help. Where they can still afford to make payments, they should continue to do so.’

Our blogs summarise the implications for solo-regulated and dual-regulated firms.

  • On 8 April, the regulator announced a series of measures aimed at assisting companies to raise new share capital in response to the coronavirus crisis while retaining an appropriate degree of investor protection. The measures differ according to whether they relate to smaller or larger share issues.
  • 8 April also saw additional measures to aid listed companies.
  • On 17 April, the regulator proposed a package of measures to directly support motor finance and high-cost credit consumers facing payment difficulties due to coronavirus. Again, these were subject to a brief consultation period, and came into effect today (24 April).

The range of targeted temporary measures cover motor finance and high cost credit agreements, which include: high-cost short-term credit (including payday loans), buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking.

  • On 20 April, the FCA set out its expectations around wet-ink signatures (i.e. when a document is required to be signed by hand with a pen).

Keep up to date with the FCA’s coronavirus updates

The regulator has frequently-updated webpages dedicated to coronavirus information. Firms can also sign up to daily or weekly updates from the FCA, by completing a form on the Authority’s website.

You can also contact us to be added to our regular blog emails; we will continue to summarise the latest developments relating to Covid-19 and wider compliance issues.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.

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