The FCA has approved cash-strapped advisers tapping into their cash buffers to ensure business continuity.
An update issued today tells advisers that it will offer flexibility to firms during the coronavirus lockdown, although it has told those in trouble to contact it with exit plans.
The FCA statement says: “We want to see firms to continue operating in this challenging period, and, where we can, we intend to provide flexibility to regulated firms to ensure this.
“Capital and liquidity buffers are there to be used in times of stress. Firms who have been set buffers can use them to support the continuation of the firm’s activities.
“Firms should be planning ahead and ensuring the sound management of their financial resources. If the firm needs to exit the market, planning should consider how this can be done in an orderly way while taking steps to reduce the harm to consumers and the markets.
“Government schemes to help firms through this period can be part of a firm’s plans for how they will meet debts as they fall due.
“If a firm is concerned it will not be able to meet its capital requirements, or its debts as they fall due, they should contact their FCA supervisor with its plan for the immediate period ahead.
“Firms that are prudentially regulated by the Prudential Regulation Authority (PRA) should consider the PRA’s requirements and discuss their concerns with them. Those firms should also keep the FCA notified of any significant developments.”
The SimplyBiz Group chairman Ken Davy says: “I was delighted to see that the FCA has promised ‘flexibility’ in its approach to the capital adequacy requirements of financial advice firms who are facing additional challenges as a result of the current coronavirus crisis. I would like to congratulate the regulator on taking such swift, and necessary, action. This common sense approach is much needed, and applies logic and pragmatism to what is an incredibly difficult situation for all, including advisers and their clients.”
The post FCA allows advisers to access cash buffers appeared first on Corporate Adviser.
