FCA provides steps for identifying key workers in financial services

The Financial Conduct Authority (FCA) has set up a webpage setting out the steps firms should take to help identify key workers in financial services.

The UK Government published guidance for schools, colleges and local authorities on maintaining educational provision on 19th March 2020.

Schools are being asked to continue to provide care for a limited number of children whose parents are critical to the coronavirus (Covid-19) response and cannot be safely cared for at home. This includes parents who work in financial services and are needed for the provision of essential financial services (key financial workers).

A key financial worker at a dual-regulated, FCA solo-regulated firm or Payment Services Regulator-regulated firm, or operators of financial market infrastructure, fulfils a role which is necessary for the firm to continue to provide essential daily financial services to consumers, or to ensure the continued functioning of markets.

The government has asked parents to keep their children at home, wherever possible, and asked schools to remain open only for those children who absolutely need to attend. The FCA only expect a limited number of people to be identified as being key financial workers.

Firms are best placed to decide which staff are essential for the provision of financial services. To help firms identify who they are, firms should first identify the activities, services or operations which, if interrupted, are likely to lead to the disruption of essential services to the real economy or financial stability. Firms should then identify the individuals that are essential to support these functions. Firms should also identify any critical outsource partners who are essential to continued provision of services, even where these are not financial services firms.

The FCA is recommending that the Chief Executive Officer Senior Management Function (SMF1) is accountable for ensuring an adequate process so that only roles meeting the definition are designated. For firms that do not have an SMF1 Chief Executive Officer this will be the most relevant member of the senior management team.

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

  • Individuals essential in the overall management of the firm, for example individuals captured by the Senior Managers Regime.
  • Individuals essential in the running of online services and processing.
  • Individuals essential in the running of branches and providing essential customer services, such as those dealing with consumer queries (including via call centres), client money and client assets and those maintaining access to cash and other payment services.
  • Individuals essential to the functioning of payments processing and of cash distribution services.
  • Individuals essential in facilitating corporate and retail lending and administrating the repayment of debt.
  • Individuals essential in the processing of claims and renewal of insurance.
  • Individuals essential in the operation of trading venues and other critical elements of market infrastructure.
  • Risk management, compliance, audit and other functions necessary to ensure the firm meets its customers’ needs and its obligations under the regulatory system.
  • Any individual that provides essential support to allow the functioning of the above roles, such as finance and IT staff.

Firms should consider whether they should issue a letter to all individuals they identify as key workers that clearly identifies them as such and that can be presented to schools on request. The FCA recommends that the letter includes the sentence “the individual has been designated as a key worker in relation to their employment by [firm name]” and is signed by someone with appropriate authority.

Firms should continue to follow the Government’s guidance closely and take the recommended steps.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

The post FCA provides steps for identifying key workers in financial services appeared first on British Insurance Brokers' Association.

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