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
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