FCA’s ‘flexibility’ intentions for firms welcomed

The financial services industry has welcomed the FCA’s intentions to provide flexibility to its solo-regulated firms during the coronavirus pandemic.

The regulator suggested capital and liquidity buffers are “there to be used in times of stress” and added that firms who have been set buffers will be able to use them to keep supporting the firm’s activities.

A statement on the FCA’s website read: “Government schemes to help firms through this period can be part of a firm’s plans for how they will meet debts as they fall due.

"If a firm is concerned it will not be able to meet its capital requirements, or its debts as they fall due, they should contact their FCA supervisor with its plan for the immediate period ahead.”

The FCA also suggested firms should be planning ahead and ensuring the “sound management” of their financial resources. If a firm needs to exit the market, the regulator added that it should consider planning how this can be done in an “orderly way” while taking steps to reduce the harm to consumers and the markets.

SimplyBiz Group chairman, Ken Davy, commented: “I was delighted to see that the FCA has promised ‘flexibility’ in its approach to the capital adequacy requirements of financial advice firms who are facing additional challenges as a result of the current coronavirus crisis.

“I would like to congratulate the regulator on taking such swift and necessary action. This common sense approach is much needed, and applies logic and pragmatism to what is an incredibly difficult situation for all, including advisers and their clients.”

Personal Finance Society (PFS) chief executive, Keith Richards, added: “The FCA’s announcement on ‘providing flexibility’ for solo-regulated firms by allowing them to access cash reserves in a prudent manner, is a welcome one.
 
“At a time when many will be feeling pressure on their business cash flow, many solo-regulated PFS members will be able to strike the right balance between the short sharp effects they are experiencing and the longer-term financial impacts.
  
“Given how swiftly markets and life are changing, it makes sense for listed firms to be excused from putting information out into the market that may be inaccurate or misleading.
 
“The PFS will continue to engage with the regulator and urge them to provide further support for financial advice businesses during this period.”

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