Since the start of the coronavirus pandemic, the Financial Conduct Authority has been issuing regular updates on changes to rules and requirements.
Today, we summarise developments since 24 April, with a round-up of the FCA’s latest Covid-19 updates.
- On 27 April, the FCA issued a statement setting out its approach to the regulation of firms in relation to the Government’s Coronavirus Business Interruption Loan Scheme (CBILS) and Bounceback Loan Scheme (BBLS).
- On 29 April, the regulator issued a statement on the impact of Coronavirus on the timeline for firms’ LIBOR transition plans.
- On 30 April, the FCA announced that it was extending the deadline for the industry to implement strong customer authentication (SCA) for e-commerce. The new timeline of 14 September 2021 replaces the 14 March 2021 date.
- The regulator has done significant work on business interruption insurance for SMEs. On 1 May, it announced its intention to obtain a court declaration to resolve contractual uncertainty in business interruption (BI) insurance cover. The action came in response to ‘continuing and widespread concerns about the lack of clarity and certainty for some customers making business interruption claims, and the basis on which some firms are making decisions in relation to claims’.
On 15 May, the FCA announced that this work would result in a High Court test case to seek legal clarity on business insurance during the crisis. A dedicated page on the Authority’s website provides more information.
- On 5 May, the regulator published updated position limits for certain commodity derivative contracts traded on UK trading venues. You can see a list of the affected contracts and the revised limits on the regulator’s website and read more details here.
- On 6 May, the maximum period firms can arrange cover for a Senior Manager without being approved was extended from 12 weeks to 36 weeks in a consecutive 12-month period. We reported previously that the FCA had issued updates on the SMCR for solo-regulated firms, and jointly with the PRA for dual-regulated firms.
- On 10 May, following the government’s updated guidance, the Authority confirmed that financial services firms should continue to follow its previous advice in terms of, for example, identifying key workers and the responsibilities of senior managers
- On 13 May, the regulator issued an update on the way it expects firms to handle post and paper documents, stressing that it understands ‘that in the current circumstances some firms may not be able to comply fully’ with the usual rules. If this is the case, firms should notify the FCA as soon as possible at email@example.com.
- A number of temporary measures were announced on 14 May to help customers who hold insurance and premium finance products and who may be in financial difficulty because of coronavirus.
Firms should consider taking actions that might include:
- Reassessing customers’ risk profiles, which may have changed as a result of coronavirus, with potential for lower premiums.
- Considering whether they can offer alternative products which would better meet the customer’s needs, revising the cover accordingly.
- Waiving cancellation and other fees associated with adjusting customers’ policies.
- Also on 14 May, the FCA confirmed specific provisions for the financial services sector in the Corporate Insolvency and Governance Bill. The Bill will include new insolvency and corporate governance measures to help businesses affected by the coronavirus (Covid-19) pandemic, announced by Business Secretary Alok Sharma on 28 March.
- On 22 May, the regulator announced proposals for continued support for customers who are struggling to pay their mortgage due to coronavirus. The proposal outlines the options firms will be required to provide to customers reaching the end of a payment holiday, as well as those who are yet to request one.
Comments on the proposals can be submitted to the regulator until 5pm on Tuesday 26 May; the FCA expects to finalise the guidance shortly afterwards.
Keep up to date with the FCA’s coronavirus updates
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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.