The FCA has announced that it will be surveying the financial resilience of around 13,000 firms from across 15 sectors. Between the 4 and 8 June 2020, firms will be sent a short survey by email to complete. In her speech at the PIMFA Virtual Festival, Megan Butler,  Executive Director of Supervision – Investment, Wholesale and Specialists, advised that firms will be given seven days to respond to the survey. The survey is intended to help the FCA better understand the effects that the Covid-19 pandemic is having on the finances of the firms it regulates and better guide its supervisory actions.

Ten key questions will make up the survey, based on the following areas:

  • liquidity/cash availability and needs;
  • recent financial performance;
  • scale of business activity; and
  • access to government schemes.

The FCA will use the results to support its ongoing work alongside existing data. It is not yet clear what follow-up actions the FCA intends to take or how it may respond to any concerns raised by a firm’s survey responses. However, any firm which is experiencing financial distress should engage with the FCA as soon as possible, in line with its existing obligations under SUP 15.

This survey is part of a broader focus by the FCA on financial resilience and safeguarding consumers, balanced against the FCA’s promise of “flexibility” for firms that may facing financial difficulties during the Covid-19 pandemic. The FCA has previously said it would monitor firms’ financial strength, particularly where there might be prudential concerns, and “continue to develop its data sets and indicators to measure this”.

More recently, the FCA expressed concerns that some payment firms have not fully implemented the client safeguarding rules from the Electronic Money Regulations 2011 or Payment Services Regulations 2017 as the FCA expected, a concern that has been heightened by the impact of Covid-19. You can read our blog post on these issues and proposed guidance here.

Update – 29 July 2020

The FCA announced that over the period of 5 to 10 August 2020 it will email a number firms it regulates with a short survey to help it “obtain a more accurate view of firms’ financial resilience as a result of coronavirus”. The FCA has stated that completion of the survey is mandatory.

The FCA’s launch of its consultation paper on operational resilience in December 2019 and other developments have continued to highlight that operational resilience is a key issue on the FCA’s agenda and Covid-19 has served to sharpen this focus.

Clive Cunningham
Clive Cunningham
Partner, London
+44 20 7466 2278

Mark Staley
Mark Staley
Senior Associate, London
+44 20 7466 7621

Katie McGrory
Katie McGrory
Associate, London
+44 20 7466 2669