August 9, 2020

Volume X, Number 222

August 07, 2020

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FCA and PRA Publish Guidance on Key Financial Workers Critical to COVID-19 Response

On March 20, the UK’s Financial Conduct Authority (FCA) and the UK’s Prudential Regulatory Authority (PRA) separately published guidance on steps for firms to take to identify key workers in the financial services industry (as, exceptionally during this crisis period while schools are closed, the children of such key workers may continue to attend UK schools).

The regulators acknowledge the exceptional circumstances caused by the COVID-19 pandemic but recognize the need for key workers in the financial services industry to continue work — specifically for the provision of essential financial services to consumers or to ensure the continued functioning of markets.

Both the FCA and PRA provide guidance to firms to help them identify their key financial workers, which includes:

  • identifying the activities, services or operations that, if interrupted, are likely to lead to the disruption of essential services to the real economy or financial stability; and

  • identifying the individuals who are essential to support those functions as well as any critical outsource partners who are essential to continued provision of services.

The regulators recommend that a firm’s SMF1 chief executive officer (CEO) (or equivalent member of the senior management team) should be accountable for ensuring that only roles meeting the definition are designated.

The types of roles that may be considered as providing essential services could be:

  • in the firm’s overall management, such as individuals captured under the Senior Managers Regime;

  • in the running of online services and processing;

  • in the running of branches and providing essential customer services;

  • to the functioning of payments processing and cash distribution services;

  • in facilitating corporate and retail lending;

  • in the processing of insurance claims and renewals; and

  • in the operation of trading venues and other critical elements of market infrastructure.

The regulators ask firms to consider issuing a letter to all identified individuals, which can be presented to schools on request. They also suggest wording for the letter and that it should be signed by an appropriate person.

FCA guidance is available here and the PRA statement is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 87

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About this Author

John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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