The Financial Conduct Authority (FCA) has said that it understands some advice firms may not be able to comply with regulation around contacting clients during the coronavirus pandemic.
In an update on its website on May 13, the watchdog said that during the covid-19 outbreak there will be some important functions, such as processing post, that will be more difficult for firms to do in a timely manner.
The FCA expects firms to comply with requirement “for post and paper-based processes” and they must notify the UK watchdog quickly if this is not possible.
Disadvantaged
The watchdog has also warned firms about clients who may not be able to utilise the advantages of technology.
It said in a statement: “Firms should try to ensure that all customers are not disadvantaged because of delays and make particular efforts to contact customers who do not use online services.
“While we understand that obligations for paper documents may be difficult to meet on usual timescales and will show flexibility in how we approach such issues, we expect firms to send communications in a timely manner.
“In particular, we are concerned that vulnerable customers, who are often more likely not to use online services, are still protected.”
Take steps
The FCA said that firms need to demonstrate to the regulator that they have taken steps to “mitigate the impact of non-compliance with postal and paper processes” and then return to full compliance as soon as it is practically viable.
It said that firms could:
- collect post and process paper-based work as frequently as they can, if this is not possible daily; and
- ensure they return client funds promptly, where they are unable to proceed with a transaction due to a delay and/or change in situation.
Businesses are expected to issue general updates on how it will treat incoming and outgoing post, and cheques, through its website and other public channels, such as social media.
The communications should update customers on market conditions, explain how they can check their financial statements and invite them to contact the firm if they wish.
The FCA said for suitability assessments, firms could use phone calls and relevant due diligence checks online, followed by an online or postal assessment.
Payments
The regulator also said: “Firms should ask those, who have sent instructions or cheques which have not been processed, to contact the firm urgently by telephone or electronic means.
“Where a customer has made a payment by cheque which has not been processed, we expect firms to consider the potential harm caused by not being able to cash the cheque on a case-by-case basis and ensure, where possible, they receive the services or cover they require, for example, retrospective cover.”
