The FCA expects financial services firms to have in place contingency plans to ensure they are responding effectively to the COVID-19 outbreak. Firms are expected to take all reasonable steps to meet their regulatory obligations, including being able to enter orders and transactions promptly into relevant systems, using recorded lines when trading and giving staff access to the compliance support they need. The FCA has no objections to these activities being undertaken at backup sites or with staff working from home, provided firms are meeting their regulatory obligations.
The FCA is in active dialogue with firms and trade associations to understand the pressures they are facing and is keeping its guidance under review as matters unfold.
The FCA is working with the Bank of England and HM Treasury on its COVID-19 response. In a speech last week, Bank of England governor Mark Carney explained that the BoE’s role is to help UK businesses and households through an “economic shock that could prove large but will ultimately be temporary”. The BoE has also announced a range of measures designed to support banks and businesses. Those measures include a drop in the interest base rate and a funding scheme to assist banks and building societies with their ability to make lending available to customers at an affordable level. The measures are explored in further detail in this post.
UK Finance has also announced support for SME businesses. In a statement by its Chief Executive Stephen Jones, UK Finance confirmed that banks and other finance providers are committed to supporting viable businesses in continuing to trade while they implement their COVID-19 contingency plans. UK Finance urged businesses to contact their finance providers early to discuss support available in the COVID-19 disruption period.
Banks themselves have indicated a pragmatic and responsible approach to customers whose businesses are impacted by the financial effects of COVID-19.
For banks and customers alike the key to mitigating the financial impact of COVID-19 will lie in robust risk management strategies and contingency planning, and early and active bank-customer dialogue.