The statement on 4 March was very much “business as usual” as the FCA expected firms to take all reasonable steps to meet their regulatory obligations.
However, the information released on 17 March takes a more understanding tone, in light of the developing situation, but without specifically relieving firms of any responsibilities.
The FCA’s primary concern is to protect consumers and maintain market integrity and its enforcement is likely to focus on these areas during the crisis.
Most firms will now have moved to working from home arrangements but should ensure that all relevant controls in respect of the above continued to be adhered to. These include maintaining appropriate records, including call recordings if required.
Where firms become aware that they will be unable to meet, or have failed to meet, any of these requirements they should contact the FCA immediately.
The FCA is more concerned with transactional reporting rather than submission of each firm’s financial data at the moment. On 22 April, the FCA released a list of various regulatory returns for which they have granted a one month filing extension and also announced that annual financial statements would be subject to a two month filing extension. This applies only to items that are due for submission prior to 30 June so for the moment no extension has been granted for audited financial statements for the period ending 31 March 2020.
However, the FCA still expects firms to submit their regulatory returns as soon as possible.
This means that firms should continue to complete the following in accordance with existing rules but to amended deadlines where applicable:
- Financial information should continue to be submitted on Gabriel (the FCA’s online system for collecting and storing regulatory data from firms) on a quarterly or semi-annual basis by the required deadlines (there has been no extension granted for these returns by the FCA).
- Audited accounts should be filed on Gabriel using the FIN-A form within 80 working days PLUS two months of the firm’s financial year-end.
- Firms are still required to update their ICAAP documents “at least annually, or more frequently if changes in the business, strategy, nature or scale of its activities or operational environment suggest that the current level of financial resources is no longer adequate”. The current situation may therefore require firms to update their ICAAP documents.
The FCA understand that firms may experience difficulties with the above but have stated that firms should not unnecessarily delay submissions.
If a firm believes they will be unable to comply with any of the requirements above they should maintain appropriate records and aim to submit regulatory data as soon as possible.
If the financial integrity of the firm is threatened in any way then the firm must let the FCA know as soon as possible in line with Principle 11.
The FCA issues regular updates on its website regarding short selling restrictions and prohibitions.
The European Securities and Markets Authority (ESMA) has decided to amend the threshold for the notification of short selling positions to 0.1% of a company’s issued share capital and the FCA has applied this change in the UK.
Regulatory bodies in other European countries are also imposing short selling bans on specific stocks. Information about these bans is published on the London Stock Exchange and/or FCA’s website.
Other reporting obligations
Firms subject to the Markets in Financial Instruments Directive (MiFID) should continue to be aware of the requirement (in Article 62 of the MiFID Org Regulation) to inform their clients where the overall value of the portfolio depreciates by 10% and thereafter at multiples of 10%.
Consultation papers and calls for input
The FCA has extended the closure dates for the following until 1 October at the earliest:
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
If you would like to discuss any of the above or have other queries about how you can make the right decisions for the future of your business and your income, please contact your usual Blick Rothenberg contact or one of the Partners to the right.
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