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Financial Services Update – August 2020

In this quarter’s issue we examine the Coronavirus measures from the FCA, FCA Connect and GABRIEL, ICT Guidelines, REP008 forms and more.

28 August 2020

Coronavirus measures

The effects of Covid-19 and the subsequent lockdown continue to be felt in financial markets and from an operational point of view for firms. The FCA has issued sector specific guidance for firms on its website in terms of how it handles certain situations (such as SM&CR managers being out of action due to Covid-19).  See here.

The FCA granted extensions in April to a number of reporting requirements and have since extended these further to apply to certain reports becoming due up to 30 September 2020. See here.

The finalising of annual accounts is a key deadline, and this has been delayed until 30 September 2020 for accounts which would usually be due by the end of July. CASS Audit obligations have not been extended however, and remain due four months after the year end.

 

FCA Connect and GABRIEL

You may have noticed when logging into GABRIEL it asks you to also log into FCA connect. This is part of the FCA’s plan to replace GABRIEL with a new system called RegData which is designed to be more user friendly and faster. Firms are due to be moved over to the new RegData system in tranches, and the FCA will tell you three weeks before hand that you are being moved over.

It is also worth noting now that on FCA Connect, firms are required to confirm at least annually that the information the FCA holds on them is correct. This can be done with a form on the Connect platform.

 

New Prudential Regime

The FCA has released a discussion paper which asks for feedback on their implantation of rule changes for a new prudential regime. Any feedback is due by 25 September 2020 and it can be read here.

Over the last few years, the FCA has been working with the EU to put together a new prudential regime called the investment Firms Regulation (IFR). This comes into effect from June 2021.

The FCA have now said that, as this is EU legislation and we will have fully left the EU by the end of 2020, they won’t necessarily be adopting it in full, but rather creating new UK rules based very closely upon it. This is what the Discussion Paper focuses on.

We have a good idea of what the rules are likely to look like and published a newsletter last year covering details of the changes. Read it here.

It’s likely that the UK rules will end up being closely aligned with the IFR so that firms in the UK can continue to transact and interreact with regulated EU firms smoothly. The FCA also had a big hand to play in the creation of the IFR rules before Brexit, which is a further reason they are likely to be adopted largely in their current form.

Although not due to come into force until June 2021, firms should begin considering how the new regime will affect them. Also keep an eye out for the FCA’s consultation paper, once feedback from the discussion paper has been finalised.

 

ICT Guidelines

Firms are now expected to comply with EBA guidance on Information and Communication Technology (ICT) and security risk management. This applies to all credit institutions, investment firms and Payment Service Providers. The guidance sets out how firms should manage their internal and external ICT and security risks. The FCA has set out their intention to comply with these guidelines. Further information can be found here

 

REP008 form

There is a new annual requirement for solo regulated firms falling under SM&CR to tell the FCA whether disciplinary action has been taken against individuals who are not senior mangers for breaches of the conduct rules. The form is called REP008 and will appear in GABRIEL, and the due date varies depending on the type of firm.

 

Can we help?

If you would like to discuss any of these developments or have questions for our specialist Finance Services team, please do get in touch.

 

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary, if you would like advice or further information, please speak to your usual Shipleys contact.

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