The UK Financial Conduct Authority's helpful page with information for firms on COVID-19 includes a number of noteworthy items:
- There is recognition that some scenarios may emerge where firms subject to the obligation to record calls under MiFID II can no longer do so. This is fine provided the firm updates the FCA and tries to mitigate the situation.
- There is recognition that firms may experience difficulties in relation to another key MiFID II obligation, the submission of regulatory data. Here, firms should keep appropriate records and submit the data as soon as they are able.
- The FCA calls out market abuse monitoring as an area where they expect firms to continue to comply with their obligations.
- No specific relief is offered in relation to operational resilience, where the FCA cross refers to its consultation on this topic.
We will continue to monitor this area as in the coming weeks there will no doubt be other areas of regulation where compliance becomes difficult or impossible.
The underlying message from the FCA seems to be that firms should focus on obligations that go directly to protecting consumers or maintaining market integrity, and that they should keep the FCA updated.
Firms may also need to think creatively when faced with difficulties in complying with their regulatory obligations. The FCA seems to expect firms to do what they can to try and meet their obligations where full compliance is not possible rather than simply not comply – for example, storing reporting information so that firms can comply at a later date.
Firms should continue to record calls, but the FCA accept that some scenarios may emerge where this is not possible.