On 20 March:
- BoE and PRA announced supervisory and prudential prudential policy measures to address the challenges of Covid-19: including:
- cancellation of the annual stress test for 2020
- pausing until further notice the results of the 2019 biennial exploratory scenario
- considering forecasts and the potential interaction of Covid-19 with IFRS9 – asking firms to reflect the temporary nature of the shocks and the uncertainty about how the economy will be affected
- postponement of the joint BoE/FCA survey into open ended funds, postponing any non-critical data requests, on-site visits and deadlines, including s166 reviews
- reviewing its approach to considering SMF applications
- postponing the consultation deadlines on operational resilience and outsourcing to 1 October (as FCA has done)
- delaying the changes to IRB models to 1 January 2022
- acknowledging the challenges of the Basel 3.1 timetable and
- pushing forward with the first meeting of the Regulatory Initiatives Forum to help co-ordinate regulatory initiatives;
- FCA has given guidance to firms on mortgages and coronavirus: it confirms:
- that firms must give customers who provide information suggesting they may have difficulty meeting home finance payments a three month payment holiday if they ask for one, and otherwise offer them a payment holiday. Firms must give customers proper information so they understand the implications of the payment holiday. FCA stresses this does not mean shorter payment holidays or alternative options may not be suitable, but that the customer should not have to pay any charge or fee in connection with the grant of a payment holiday;
- that firms should not commence or continue repossessions and must ensure customers are kept informed of the consequences of any suspension;
- ESMA has clarified its expectations around the recording of telephone conversations under MiFID 2. It recognises that there may be some scenarios where recording is not practicable, and asks firms in that situation to consider what alternative steps they can take to mitigate the risks of non-recording while trying to get recording ability restored as soon as possible;
- the Financial Stability Board has stated that all its members are co-operating closely and will coordinate action to keep markets open and functioning; and
- FCA has published guidance for firms on how to identify key workers :in the sector. It says firms are best placed to decide which of its staff are essential, but says they should start by identifying the activities, services or operations that would be likely to lead to the disruption of essential services to the real economy or financial stability if interrupted. Firms should also identify critical outsource partners. FCA suggests the SMF1 be accountable for ensuring an adequate process. It suggests relevant roles may be individuals essential in
- the overall management of the firm;
- the running of online services and processing;
- the running of branches and provision of customer services;
- payments processing and cash distribution;
- corporate and retail lending and administration of debt repayment;
- processing of claims and insurance renewals;
- operation of trading venues and other critical elements of market infrastructure;
- risk management, compliance, audit and similar functions; and
- support to the above roles, like finance and IT staff.
It says firms should consider issuing a letter to all individuals they consider to be key workers that the individuals can present to schools.
PRA’s website mirrors FCA’s guidance.