The FCA is to issue a survey to approximately 13,000 solo-regulated firms this week requesting information on their financial resilience.
Responding to this request will not be voluntary for these firms as the FCA will be using its powers under section 165 of The Financial Services and Markets Act 2000 (“FSMA”) to require firms to respond.
The relevant 15 sectors are
Each of these firms is to receive an initial email, introducing the survey. The survey will then be issued in two groups:
The FCA anticipates that the 10-question survey will take approximately an hour to complete. Only time will tell if this proves to be optimistic on the FCA’s behalf due to the nature of the responses being required. Questions will cover matters including liquidity positions and safeguarded assets, as well as other financial data. We understand that the FCA will use the information to formulate a view of financial resilience during the pandemic. However, firms should be under no illusion that the FCA will not seek further information or consider intervention concerning firms should their responses to the survey raise concerns with the FCA regarding individual firms’ or a sector’s financial stability, including whether firms are able to meet their ongoing regulatory obligations.
The survey link will be issued to a specific named person within each firm, via a mobile app. It will not be on Gabriel. All firms in the in-scope sectors are expected to complete the survey, unless the required information has already been provided in a recent submission. Completion of the survey is mandatory, on a best efforts basis. We understand the FCA will not publish the details provided to it in response to the survey.
It is key to note that the FCA anticipates that it will repeat the survey on a periodic basis and could also widen the scope. The detail of any future surveys will be determined at a later date but this is a key area of focus for the FCA during the current challenging economic climate. Firms should expect that any follow up may well include testing whether projections or predictions of future resilience were accurate or reasonable. Again, this may lead to the FCA challenging individual firms and their senior management on both the responses provided and their current financial resilience.
It is vital that firms, when responding to the FCA’s information requirement, ensure they fully consider the potential impact of the information provided to the FCA, how the FCA may interpret it and above all else ensure its accuracy. The FCA has illustrated on an ongoing basis how it will intervene if it receives inaccurate information or is concerned about the financial resilience of firms. Similarly, the FCA will not be reticent to hold senior management accountable in this regard.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions
Risks of customer onboarding in a remote environment webinarRead more
Emerging conduct risks and handling conduct risk incidents webinarRead more
Brexit: transition & beyondRead more
The FCA 2019 - 2020 Annual Report and Accounts: Everything you need...Read more
TLT grows Legal 500 rankingsRead more
Financial services investigations and enforcement monthly round up -...Read more
TLT supports Landmark with record £70m debt raiseRead more
Seven top questions on returning staff to work during coronavirusRead more
Financial services investigations and enforcement round-up - August...Read more
The way people shop is constantly evolving, from the growth of online and the changing use of stores...Read more
Helping you navigate your business through the risks and opportunities that Brexit will bring.Read more
Green finance is gaining speed, driven by global climate change pressures and the recognition of the vital role which sustainability plays in a resilient financial services sector.Read more
As businesses adjust to new ways of working and plan for an uncertain future, we keep track of the emerging legal and regulatory issues.Read more
Keep on top of the employment law issues that matter most to you and your business with our new podcast.Read more
Keeping you up to date with the latest guidance on regulatory change and legal impact of the coronavirus pandemic.Read more
While future trading relationship with the EU is negotiated, we will be in a 'status quo' transition period until 31 December 2020. Follow our latest updates.Read more
Our Senior Managers Regime hot topic features news and insight to help banks, building societies, investment firms and UK branches of foreign banks prepare for the new regime.Read more
The clock is ticking for firms to prepare for moving from LIBOR to sterling risk-free rates. Follow our insights and events for strategic advice.Read more
Working with UK and international banks on domestic and cross-border debt finance activity.Read more
Providing a complete service covering all aspects of regulatory law.Read more
Guidance on every aspect of regulatory change and all types of regulatory issues to clients ranging from retail banks to insurance and credit brokers, sub-prime lenders, credit providers and payment service providers.Read more