Recent regulatory developments of interest to financial institutions with focus on consumer finance. Includes updates on the latest UK FCA COVID-19 temporary guidance.
Contents
- COVID-19: FCA consults on updated temporary guidance for motor finance and HCSTC agreements
- COVID-19: FCA additional guidance for payment and e-money firms on safeguarding customers' funds
COVID-19: FCA consults on updated temporary guidance for motor finance and HCSTC agreements
On 3 July 2020, the UK Financial Conduct Authority (FCA) published for consultation updated temporary guidance for firms, which sets out measures to ensure that continued support is provided to users of:
who are affected by COVID-19.
The draft updated guidance emphasises the need for appropriate staff training, monitoring and record-keeping on implementation, as well as making it clear that adopting a single solution for all customers requiring further support is likely to contravene Principle 6. Firms are therefore going to need to revisit current related documentation and processes.
Read more in our separate briefing: COVID-19: FCA consults on updated temporary relief measures for motor finance and HCSTC agreements.
The short consultation closed on 6 July 2020. The FCA expects to finalise the guidance soon.
The FCA will keep the temporary guidance under review and update it as necessary. Unless renewed or updated, it is proposed that the temporary guidance will expire on 31 October 2020, except where a customer has been granted a payment deferral that continues beyond 31 October 2020, where certain aspects of the guidance will remain in force as stated in the guidance.
COVID-19: FCA additional guidance for payment and e-money firms on safeguarding customers' funds
On 9 July 2020, the FCA published finalised guidance for payment and e-money firms in light of COVID-19 to strengthen their prudential risk management and arrangements for safeguarding customers' funds in this period of economic stress. It follows the FCA's earlier consultation on which it also published a feedback statement, FS20/10.
This guidance applies to authorised:
- payment institutions or small payment institutions;
- e-money institutions or small e-money institutions; and
- credit institutions and custodians.
The FCA hopes to conduct a full consultation later in 2020/21 on changes to its Payment Services and E-Money Approach Document. This is likely to propose incorporating this additional guidance on safeguarding and prudential risk management. This will give stakeholders a second opportunity to comment on any measures that the FCA proposes to apply permanently, building on this temporary guidance.
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