Read our expectations so firms can plan and continue to meet their regulatory responsibilities.
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Due to the coronavirus (Covid-19) pandemic, firms are already familiar with working in a remote environment and adapting their systems and controls. It is likely many firms will continue these new ways of working.
These expectations apply to:
- existing firms
- firms applying to be regulated
- firms proposing to submit further applications, such as a waiver, variation of permission, change of control etc
These expectations will evolve as more is understood about how firms intend to operate.
International firms should continue to have an establishment or physical presence in the UK. See our approach to international firms.
We will evaluate firms considering remote or hybrid working on a case-by-case basis. Your firm should consider the following.
How firms operate their business
Firms should be able to prove that the lack of a centralised location or remote working does not or is unlikely to:
- affect the firm’s location in the UK, or its ability to meet and continue to meet the threshold conditions for the regulated activities it has or will have permission for – or any equivalent requirements, where these do not apply
- prevent the FCA receiving information about a firm
- reduce the accuracy of the Financial Services (FS) Register for others if, for example, consumers are not able to contact the firm at its principal place of business shown on the FS Register
- affect the firm's ability to oversee its functions including any outsourced functions
- cause detriment to consumers
- damage market integrity
- increase the risk of financial crime
- reduce competition.
A firm must also prove it has satisfactory planning, as follows:
- The firm has a plan in place. The firm has reviewed it before making any temporary arrangements permanent. The firm reviews it periodically to identify new risks.
- The firm's senior managers have appropriate governance and oversight under the Senior Managers regime, and through committees such as the Board, and by non-executive directors where applicable. This governance is capable of being maintained.
- The firm can cascade policies and procedures to reduce any potential for financial crime arising from its working arrangements.
- The firm can put in place an appropriate culture and maintain it in a remote working environment.
- Control functions such as risk, compliance and internal audit can carry out their functions unaffected, such as when listening to client calls or reviewing files.
- The nature, scale and complexity of the firm's activities, or legislation, does not require the presence of an office location.
- The firm has the systems and controls, including the necessary IT functionality, to support the above factors being in place, and these systems are robust.
- The firm has considered any data, cyber and security risks, particularly as staff may need to transport confidential material and laptops more frequently in a hybrid arrangement.
- The firm has appropriate record-keeping procedures in place.
- The firm can meet and continue to meet any specific regulatory requirements, such as call recordings, order and trade surveillance, and consumers being able to access services.
- The firm has considered the effect on staff, including wellbeing, training, and diversity and inclusion matters.
- If any staff will be working from abroad, the firm has considered the operational and legal risks.
The above is an indicative and non-exhaustive list. It's important that any form of remote or hybrid working you adopt should not risk or compromise the firm's ability to follow all rules, regulatory standards and obligations, or lead to a failure to meet them.
Firms’ engagement with the FCA
Firms should consider if their details on the FS Register need updating. For example, if your firm intends to use a private residential address as its principal place of business, it should consider the effect on any individuals – including those living at the property who aren't employees – and get the necessary approvals.
We should be able to access firms’ sites, records and employees. It’s important that firms are prepared and take responsibility to ensure employees understand that the FCA has powers to visit any location where work is performed, business is carried out and employees are based (including residential addresses) for any regulatory purposes. This includes supervisory and enforcement visits.
Notifying us of changes to your working arrangement
Any material changes to how your firm intends to operate may require you to notify us first. Under Principle 11 of the FCA’s Principles for Businesses, firms must deal with the FCA in an open and cooperative way and to disclose to us anything relating to the firm which we would reasonably expect notice of.
SUP 15.3 sets out additional rules and guidance about when the FCA would expect notice of matters relating to a firm. You should continue to monitor any changes and speak to your usual supervisory contact with any questions.