The Financial Conduct Authority (FCA) has published finalised guidance (FG20/1) about its framework designed to help financial services firms ensure they have adequate financial resources and to take effective steps to reduce harm.
The guidance aims to improve the way firms operate so that they can take effective steps to prevent harm from occurring, by improving controls and/or reducing the risk in their activities, and can put things right when they go wrong.
Members may access Finalised Guidance G20/1 Our Framework: assessing adequate financial resources by clicking here.
The FCA said the framework document aims to provide more clarity to the industry relation to:
- role of adequate financial resources in minimising harm
- the practices firms can adopt when assessing adequate financial resources
- how we assess the adequacy of a firm’s financial resources
The FCA said the intention is not to increase general levels of financial resources across financial services but to take a proportionate and risk-based approach to the supervision of firms.
The guidance is said not to place specific additional requirements on firms because of Covid-19, but the crisis underlines the need for all firms to have adequate resources in place and to assess how those needs may change in the future.
BIBA members’ compliance and regulation queries should be directed to: [email protected].