On March 26, the UK’s Financial Conduct Authority (FCA) published a statement on its expectations of FCA solo-regulated firms in light of the Covid-19 pandemic (the Statement).

At the beginning of the Statement, the FCA clarifies that it will provide flexibility to these regulated firms so that they can continue to operate. For instance, the FCA notes that those firms who have been set capital and liquidity buffers may use them now.

The FCA also notes that firms should ensure the sound management of their financial resources and may consider accepting government schemes to help them meet their debts through this period. If a firm needs to exit the market, it should consider how this may be done in an orderly way while taking steps to reduce any potential harm to consumers and markets. If a firm encounters challenges in meeting its capital requirements or its debts, it should contact its FCA supervisor with a plan for the immediate future.

In the Statement, the FCA notes that prudentially regulated firms should consider the Prudential Regulation Authority requirements and discuss their concerns with them. Those firms should also notify the FCA of any significant developments.

The Statement is available here.