Coronavirus Update (2) – Commission Support for Financial Services Industry19th March 2020
The Commission is closely monitoring the coronavirus situation and will be increasing its financial stability monitoring work and acting to ensure that consumers are protected where necessary. We would appreciate firms’ co-operation with our financial stability enquiries when we make them as we need to be able to continue to understand the health of the largest part of Guernsey’s economy during this coronavirus episode, working alongside the States of Guernsey to minimise the long-term economic damage.
We expect firms to be taking reasonable steps to ensure they are prepared to meet the challenges coronavirus could pose to customers and staff. We also expect firms to manage their financial and operational resilience including actively managing their liquidity. Firms should report to us immediately if they believe they will be in difficulty rather than waiting until the last minute before speaking to us. For example, we expect firms to be monitoring their financial resources requirement and having early conversations with us as soon as they are aware that they might breach it at a foreseeable date in the future.
The Commission has reviewed its work plans for 2020 and will be cutting or delaying considerable amounts of industry-facing activity that does not directly relate to financial stability or consumer welfare. Consequently, all routine supervisory visits to firms will be postponed with effect from 21 March unless the Commission becomes aware of serious issues that require close scrutiny 1. By taking this action, the Commission hopes that it will allow firms to focus on supporting their customers and staff during this difficult episode.
We appreciate that more home working may create issues for firms in terms of how controls operate and in terms of staff morale and trust that all firms will take reasonable steps to manage employee wellbeing during home working, taking into account the additional strains it places upon them relative to working in a supportive office environment. Whilst we are consciously postponing routine financial crime inspections on a pragmatic basis to give firms space to deal with the difficult economic circumstances, we cannot but stress that the directors or partners of firms remain responsible for ensuring high ethical standards of behaviour during the coronavirus episode as at any other time.
Many within industry will be aware that the Commission had already determined that the quantity of financial crime data which we gather needs to be enhanced. In the light of coronavirus we intend to enhance our financial crime risk return in two stages with modest enhancements to this year’s return and with more demanding enhancements following the end of the coronavirus episode. In deciding to stagger this implementation, the Commission is conscious of the difficulties firms would have in adapting to novel financial crime data requirements in the current circumstances.
We would remind firms, following enquiries, that the financial crime handbook which came into effect in March 2019, allows for electronic verification of customers. We would urge firms who have not adapted to such verification methods to make full use of the electronic options available rather than relying on paper-based systems which may be difficult to operate during the coronavirus episode.
We will be continuing to develop policy with a specific view to maximising the opportunities for the recovery of the Bailiwick’s financial services economy at the end of the coronavirus episode.
1 The Commission will continue to progress the small number of enforcement actions which are already underway to the extent public health guidance allows us to do so as we do not wish individuals to be under enforcement investigation for any longer than necessary.