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FCA information for firms on Coronavirus response

Source: FCA

We are closely monitoring the coronavirus situation. The FCA stands ready to take any steps necessary to ensure customers are protected and markets continue to function well. We are working closely with the Government, the Bank of England, the Payment Systems Regulator and firms on this.

We have significant resources focused on our response, both for the firms we regulate and our colleagues. Dedicated teams have been set up and the situation is being overseen by our executive committee.

Our rules give firms the ability to consider their arrangements and customers’ circumstances. We welcome firms reviewing their current arrangements to address the evolving situation while managing the risks to their employees, customers and the impact on the market.

We are in regular contact with firms to assess their current position, and expect firms to be taking reasonable steps to ensure they are prepared to meet the challenges coronavirus could pose to customers and staff, particularly through their business continuity plans. We expect firms to provide strong support and service to customers during this period. They should be clear and transparent and provide support as consumers and small businesses face challenges at this time. We also expect firms to manage their financial resilience and actively manage their liquidity. Firms should report to us immediately if they believe they will be in difficulty.

We will continue to update this page with information for firms over the coming weeks and would expect to adapt our guidance to firms as the coronavirus situation develops to both facilitate and ensure consumers are protected and markets function well.
Regulatory change

We are reviewing our work plans so that we can delay or postpone activity which is not critical to protecting consumers and market integrity in the short-term. This will allow firms to focus on supporting their customers during this difficult period.

One of the immediate actions we are taking is to extend the closing date for responses to our open consultation papers and Calls for Input until 1 October 2020 and rescheduling most other planned work. See below list. We have also scaled back our programme of routine business interactions, especially through meetings so that we only contact firms on business-critical requests and responses to the current situation.

We will continue with a small number of regulatory changes which support consumers, particularly the most vulnerable, or where major long-term programmes would be disrupted.
Impact on consumers

Our rules already provide flexibility to firms in a number of areas and we expect them to use this flexibility to support consumers, bearing in mind customers’ individual circumstances.

For example, a number of firms have taken some steps to enable customers’ access to cash, such as waiving fees for individual savings accounts (ISAs) and allowing them to end their term deposits early.

We welcome firms taking initiatives going beyond usual business practices to support their customers. When doing so, firms should notify us so we can consider the impacts and offer support as appropriate.

We still expect firms to deal with complaints promptly. However, where the pandemic prevents this firms should contact us; we understand the pressures firms will be under. Firms are reminded that they should aim to resolve any complaint within 8 weeks (15 days for payments firms). If they cannot, they should write to the customer explaining why they have not met the deadline.

Mortgages represent many consumers’ major financial commitment. We have been encouraged by the actions of some lenders in granting flexibility on mortgage payments as a way of protecting consumers. We will be discussing with the industry and updating approaches mortgage providers may take to assisting their customers in the coming days.
Unsecured debt products

Our rules give firms the flexibility to act in the best interests of the customer. We welcome the steps firms have taken to offer support to customers and to encourage them to contact their bank or lender if they are experiencing financial difficulties.

In the current climate, we want firms to show greater flexibility to customers in persistent credit card debt.

Under our rules, firms are required to take a series of escalating steps to help customers who are making low repayments over a long period. After 36 months of someone being in persistent debt the provider must offer options to help repay the debt more quickly. If customers do not respond within a period set by the firm the card must be suspended.

Given the challenges facing many customers at present we think they should be given more time, until 1 October 2020, to respond to firms’ communications. This means that firms would not be obliged by our rules to suspend the cards of non-responders before then.

This applies both to those who have already received communications from their provider and those that are yet to receive them.

We will be in touch with firms shortly to confirm details of this proposal.
Access to cash

We are working with the Bank of England and the Payment Services Regulator to understand problems consumers may have accessing cash, and ensure the UK learns the lessons from other countries’ experience of coronavirus.

UK firms have taken steps to help ensure consumers have access to cash, including the raising of cash machine withdrawal limits.

We are confident electronic payment providers have capacity to cope with the potential changes in transaction numbers.

We recognise that a growing number of people may use online or phone banking services, in some cases for the first time. Firms should continue to help vulnerable consumers access their banking services - online or over the phone. Firms should also remind consumers to be aware of fraud and protect their personal data.
Insurance products
Travel insurance

We support firms making consumers aware of the scope of their cover and what exemptions there may be. Consumers should also be able to find this information on firms’ websites in a clear, concise way and have access to call centres. We have provided guidance to consumers on our website.
Health insurance

We also expect firms to make clear any time period restrictions when consumers take out a new policy, for example if a policy will not pay out from 12 or 18 months of taking out a new policy.
Operational resilience

We expect all firms to have contingency plans to deal with major events and that the plans have been tested. Alongside the Bank we are actively reviewing the contingency plans of a wide range of firms. This includes firms’ assessments of operational risks, the ability of firms to continue to operate effectively and the steps firms are taking to serve and support their customers.

Firms should take all reasonable steps to meet the regulatory obligations which are in place to protect their consumers and maintain market integrity. For example, if a firm has to close a call centre - requiring staff to work from other locations (including their homes) - the firm should establish appropriate systems and controls to ensure it maintains appropriate records. Our rules are not specific in respect of call recording in such situations.

We will continue proactively discussing with firms and trade associations the issues they are facing, and we will be continuing our active dialogue with them in the coming days and weeks.

Our consultation paper sets out further information on operational resilience matters that firms should be considering.
Market trading and reporting

As firms are moving to alternative sites and working from home arrangements, they must consider the broader control environment in these new circumstances.

Firms should continue to record calls, but we accept that some scenarios may emerge where this is not possible. Firms should make us aware if they are unable to meet these requirements. We expect firms to consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice communications. This could include enhanced monitoring, or retrospective review once the situation has been resolved.

Firms may experience difficulties in submitting their regulatory data, in which case we expect them to maintain appropriate records during this period and submit the data as soon as possible. Firms should not unnecessarily delay these submissions. If firms have concerns, they should contact us as soon as possible.

Firms should continue to take all steps to prevent market abuse risks. This could include enhanced monitoring, or retrospective reviews. We will continue to monitor for market abuse and, if necessary, take action.
Delayed Consultation Papers and Calls for Input

The FCA has decided to extend the closure dates for the following published Consultation Papers and Calls for Input until 1st October 2020.
Delayed Consultation Papers:

CP20/4: Quarterly Consultation No 27
CP19/32: Building operational resilience: Impact tolerances for important business services
CP20/1: Introducing a Single Easy Access Rate for cash savings
CP20/3: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations
CP20/5: Consultation paper on ETF Listing: Premium to Standard Listing

Delayed Calls for Input:

Open Finance
Accessing and using wholesale data

Delays to publications and other activity

We have decided to delay the following publications due before end June. We will provide updates at an appropriate point. For the GI pricing market study, we continue to aim for summer publication but will keep this under review.

Joint PRA FCA work to develop industry led guidance on how to integrate climate related risks into business decision making across the FS sector.
Motor Finance PS
CP mortgage switching and info request for CBA
Vulnerability Guidance
Vulnerability Research
New Consumer Principle
Consumer Credit Act (CCA) review
CP mortgage switching and info request for CBA
Credit Information Market Study - Interim Report
GI Pricing Final report and Consultation Paper on remedies

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