Regulatory Update

Thornbridge Regulatory Update – Coronavirus May 2020

by Thornbridge

Welcome to a Coronavirus edition of our regulatory update, which aims to pull together various regulatory developments and their implications for Appointed Representatives and other firms operating in the regulated space.

Welcome to a Coronavirus edition of our regulatory update, which aims to pull together various regulatory developments and their implications for Appointed Representatives and other firms operating in the regulated space.

Coronavirus (Covid-19)

Over recent weeks the FCA have announced a series of measures to support both consumers and businesses who hold insurance policies. This includes:

  • seeking legal clarity on business interruption (BI) insurance to resolve doubt for businesses who are facing uncertainty on their claims
  • proposed guidance setting out their expectations that insurance firms should look at whether their products still offer value to customers in the current situation

They also published guidance setting out their expectations that firms should help individual customers who may be finding it difficult to pay their insurance premiums or meet their premium finance payments as a result of coronavirus.

They recognise that such rapid changes aren’t always easy to keep up with. That’s why they have published a series of pages on their website for firms on coronavirus. This includes dedicated pages for firms on insurance and mortgages.

All Sectors

Financial Services Regulatory Initiatives Forum launches Grid to help financial firms’ planning

The Financial Services Regulatory Initiatives Forum has published the Regulatory Initiatives Grid. The Forum comprises the major UK financial services authorities. The Grid is a 12-month forward look of major regulatory initiatives affecting the financial services sector. It will help firms understand – and plan for – the timing of the initiatives that may have a significant operational impact on them.

Financial crime systems and controls during coronavirus

The FCA have set out their high-level expectations on the application of firms’ systems and controls for combatting and preventing financial crime during the ongoing pandemic. It focuses on the importance of remaining vigilant to new or emerging threats, while also recognising that firms may need to re-prioritise or delay some activities on a risk basis. They have also provided links to other statements relevant to firms’ financial crime arrangements, for example remote client identify and verification, and submission of regulatory returns.

Period to cover absent Senior Managers extended due to Coronavirus (Covid-19)

The FCA have extended the maximum period firms can arrange cover for a Senior Manager without being approved, from 12 weeks to 36 weeks, in a consecutive 12-month period.

The modification by consent to rule SUP10.3.13R is available to all solo regulated firms and it provides flexibility in managing governance arrangements during the coronavirus pandemic. It can be used if, for example, a Senior Manager is absent because of coronavirus, or recruitment to replace a Senior Manager is delayed due to the pandemic. You may also as a precautionary measure, in advance of actually needing it.

Coronavirus Updates

Statement on the UK Coronavirus Business Interruption Loan Scheme (CBILS) and the new Bounce Back Loan Scheme (BBLS)

The FCA have issued a statement on the application of the Consumer Credit Sourcebook, Senior Managers & Certification Regime and Financial Crime rules in respect of the Government support measures delivered through the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Schemes (BBLS).

Statement on how firms should handle post and paper documents

The FCA have issued their statement on how firms should handle post and paper documents. They continue to expect firms to comply with the requirements for post and paper-based processes (both incoming and outgoing). But they also understand that in the current circumstances some firms may not be able to comply fully with them. Where this is the case, they expect firms to notify us as soon as possible by emailing

Financial services exemptions in forthcoming Corporate Insolvency and Governance Bill

On 28 March 2020, Business Secretary Alok Sharma announced new insolvency and corporate governance measures to help businesses affected by the coronavirus (Covid-19) pandemic. These measures are expected to be included in the Corporate Insolvency and Governance Bill (Bill).

Specific provisions in the Bill are necessary for the financial services sector to protect consumers and financial stability. These will help to ensure that the UK’s existing special insolvency regimes for financial sector firms remain effective, and that financial market participants have the legal certainty so that financial markets function effectively.

For more information on the Bill and the exclusions in place for some financial services firms, please see their statement.

Firm handling of complaints during Coronavirus

The FCA have published guidance on how firms should handle complaints during coronavirus. While they understand that firms’ capacity to handle complaints could be reduced as a result of the current circumstances, they have set out their expectations of firms to prioritise:

  1. paying promptly complainants who have been offered redress and accepted that offer
  2. the prompt and fair resolution of complaints from consumers who are likely to be vulnerable to harm if their complaint is not resolved promptly and fairly, and
  3. sending timely holding responses to those complainants where their complaints cannot be resolved promptly

Information security & financial crime

The exceptional circumstances introduced by coronavirus have caused firms to change their ways of working at pace. This is while cyber criminals are increasingly exploiting coronavirus related themes for their own gain. On 6 May the FCA published some updates setting out their expectations on information security & financial crime systems and controls.

Banks & Building Societies

Accessing restricted savings

The FCA have updated their coronavirus information page for firms, reminding them of their obligations to treat customers fairly when responding to requests for access to restricted savings products. During the coronavirus crisis, consumers may request access to these savings to pay for essential goods and services, particularly if they have experienced a loss of income.

Treating customers fairly does not mean firms must offer access to all customers, but they should consider the circumstances of each customer and the impact giving access would have. They should balance customer needs against other factors, such as managing prudential risk.

Digital Sandbox Covid-19 pilot

The FCA have updated their website to announce the Digital Sandbox Covid-19 pilot. Building on their approach to innovation, they are collaborating with key strategic partners and the industry to pilot a ‘digital sandbox’. This will provide enhanced regulatory support to innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic. They will be announcing the specific Use Cases the pilot will target and opening applications later in the Summer. In the meantime, they welcome expressions of interest from firms. In particular, they are keen to hear from firms or individuals who have an interest or specialism in data anonymisation or synthetic data generation. For further information please email

General Insurance Intermediaries & Insurers

Product value and Coronavirus

The FCA have set out their expectations for insurers and insurance intermediaries to consider the value of their products in light of the exceptional circumstances arising out of coronavirus. The guidance is intended to highlight what they consider firms should be doing to identify any material issues that affect the value of their products, and their ability to deliver good customer outcomes, during this unprecedented time. Where firms identify any material issues they should consider the appropriate action to take. The guidance closes at 5pm today (15 May) and they will announce finalised guidance, subject to feedback soon.

Customers in temporary financial difficulty and Coronavirus

The FCA have set out their expectations for firms when dealing with customers who may be experiencing temporary financial difficulty as a result of the coronavirus pandemic. The aim of the guidance is to prompt firms to help qualifying consumers, where possible, in order to:

  1. Minimise the impact of temporary financial distress.
  2. Ensure that customers continue to have insurance that meets their demands and needs.

Access to premises and Coronavirus

The FCA have updated their expectations of firms on how firms treat customers who may not be able to access their premises as a result of Government restrictions on travel and the ongoing coronavirus situation. Where access is required as part of the terms of a policy, they expect insurers to take account of a customer’s temporary change in how they access those premises, and treat their customers fairly. They don’t expect insurers to void policies or reduce potential claims as a result. Customers should contact their insurer if they are concerned about being unable to access their property.

Business interruption (insuring SMEs)

The FCA announced their intention to obtain a court declaration to resolve contractual uncertainty in business interruption (BI) insurance cover. This is due to continuing and widespread concerns about the lack of clarity and certainty for some customers making BI claims, and the basis on which some firms are making decisions in relation to claims. This is not intended to encompass all possible disputes, but resolve some key contractual uncertainties. This will assist both insurers and the insured. It will not determine how much is payable under individual policies, but will provide the basis for doing so.

Financial crime systems and controls during Coronavirus situation

The FCA have set out their expectations on how firms should apply their systems and controls to combat and prevent financial crime during this crisis. It is important that firms remain vigilant to new types of fraud and amend their control environment where necessary to respond to new threats. They recognise that there may be operational challenges in relation to financial crime systems and controls, and while firms should not seek to address operational issues by changing their risk appetite, they understand that they may need to re-prioritise or reasonably delay some activities.

Brexit Matters


The UK left the EU on 31 January 2020 and entered a transition period, which is due to end on 31 December 2020. Find out what this means for firms and consumers on their Brexit pages.

Temporary Transitional Power (TTP)

The FCA have confirmed that after the transition period, they intend to apply the TTP on a broad basis and to the same areas previously communicated. They intend to grant transitional relief from the end of the transition period until 31 March 2022. There are specific areas where they will not grant transitional relief. In these areas, they continue to expect firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by the end of the transition period. For further information see here.

If you would like to read previous regulation updates, we’ve compiled a regulation update for:

May 2020 Regulation Update

March 2020 Regulation Update

January 2020 Regulation Update


The contents of this document are taken from the Financial Conduct Authority’s (“FCA”) May 15th 2020 regulation round up communication and are communicated by, and the property of, Thornbridge. Thornbridge is a trading name of Thornbridge Investment Management LLP which is authorised and regulated by the Financial Conduct Authority.

The information and opinions contained in this article are subject to updating and verification and may be subject to amendment. No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained in this document by Thornbridge Investment Management LLP or its directors. No liability is accepted by such persons for the accuracy or completeness of any information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained in this document.

Author: Thornbridge