PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update - Monday, March 30, 2020
March 31, 2020
FedACTion Task Force
= Update related to COVID-19
PH Client Alerts
PH COVID-19 Client Alert Series: Overview of CARES Act and its Applicability to the Hospitality and Leisure Industry
March 30, 2020
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted. The CARES Act provides more than $2 trillion of federal economic relief to businesses, governmental entities, and individuals affected by COVID-19. While the scope of the CARES Act is extensive, this summary is intended only to provide a high level discussion of the key provisions most likely to benefit owners and operators of hospitality and leisure properties.
PH COVID-19 Client Alert Series: Availability of SBA Care Act Loans to Venture- and Private Equity-Backed Businesses
March 28, 2020
The $2 trillion stimulus CARES Act enacted on Friday, March 27th, has venture- and private equity-backed companies and their investors scrambling to digest the 883-page text of the Act.[i] A centerpiece of the Act is the allocation of $349 billion for loans on very attractive terms to small businesses through Title I of the bill, known as the Keeping American Workers Paid Act. Venture- and private equity-backed businesses want to know whether they will be eligible for those loans. We have prepared a high-level discussion of the loans and their eligibility requirements.
PH COVID-19 Client Alert Series: Germany Passes Bill on Mitigation of COVID-19 Pandemic Consequences
March 30, 2020
On Friday, 27 March, 2020, the German Parliament passed the so-called “Bill on Mitigation of the Consequences of the COVID-19 Pandemic in Civil, Insolvency and Criminal Procedure Law”, which will therefore soon enter into force. From a real estate law perspective, this bill particularly restricts the landlord’s right of termination in the event of non-payment of rent by the tenant. Against the background of the changes in the current law, we have prepared answers to relevant questions on tenancy law that have been raised by clients (both landlords as well as tenants).
Click here to read more from our Coronavirus series.
Congress
Click here to view a running list of proposed legislation from the Senate Committee on Banking, Housing and Urban Development, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.
U.S. Senate
Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), 116 HR. 748, Enacted March 27, 2020.
Families First Coronavirus Response Act, 116 P.L. 127, 116 H.R. 6201, 134 Stat. 178, Enacted March 18, 2020.
Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, 116 P.L. 123, 116 H.R. 6074, 134 Stat. 146, Enacted March 6, 2020.
Click here to view a running list of proposed legislation from the Senate Committee on Banking, Housing and Urban Development, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.
Committee on Small Business and Entrepreneurship
Bipartisan Task Force to SBA and Treasury: Act Quickly to Implement Small Business Coronavirus Relief
March 30, 2020
Senators Marco Rubio (R-FL), Ben Cardin (D-MD), Susan Collins (R-ME), and Jeanne Shaheen (D-NH) sent a letter to Jovita Carranza, Administrator of the U.S. Small Business Administration (SBA), and Steven Mnuchin, Secretary of the U.S. Department of the Treasury requesting immediate commitment and action to implement the Keeping American Workers Paid and Employed Act, which was signed into law as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Rubio Releases FAQ Document on the Paycheck Protection Program for Small Businesses
March 28, 2020
U.S. Senator Marco Rubio (R-FL), Chairman of the Senate Committee on Small Business and Entrepreneurship, released his own FAQ document in English and in Spanish detailing how small business owners can take advantage of the new Paycheck Protection Program (PPP), a key provision of Rubio’s bipartisan Keeping American Workers Paid and Employed Act that was signed into law as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Federal Agencies
Federal Reserve Board
Federal Reserve announces establishment of a temporary FIMA Repo Facility to help support the smooth functioning of financial markets
March 31, 2020
The Federal Reserve announced the establishment of a temporary repurchase agreement facility for foreign and international monetary authorities (FIMA Repo Facility) to allow central banks and other international monetary authorities with accounts at the Federal Reserve Bank of New York, to enter into repurchase agreements with the Federal Reserve.
Credit Concentrations: Joint Statement on Adjustment to the Calculation for Credit Concentration Ratios Used in the Supervisory Approach
March 30, 2020
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), are jointly adjusting their calculation for credit concentration ratios used in the supervisory process. The adjustment is in response to changes in the capital information available after the implementation of the Community Bank Leverage Ratio (CBLR) rule. Effective March 31, 2020, for supervisory purposes, examiners will calculate credit concentration ratios using tier 1 capital plus the appropriate allowance for loan and lease losses or the allowance for credit losses attributed to loans and leases (as applicable) for the denominator.
Federal Reserve Bank of New York
REVISED FAQs: Primary Dealer Credit Facility
March 30, 2020
The FRBNY modified its FAQ on the Primary Dealer Credit Facility PDCF, a loan facility that will provide credit to primary dealers in exchange for a broad range of collateral for term funding with maturities up to 90 days. The PDCF is intended to support the functioning of financial markets more generally and to expand the ability of primary dealers to gain access to term funding.
Conference of State Bank Supervisors
Texas Banking Commissioner and State Banking FSOC Member Charles Cooper Statement on FOSC’s Efforts to Support U.S. Financial System
March 26, 2020
Texas Banking Commissioner and Financial Stability Oversight Council (FSOC) state banking representative Charles G. Cooper statement on FSOC’s efforts to support U.S. financial system during COVID-19 pandemic.
CSBS: Fed Should Establish Liquidity Facility to Support Mortgage Servicers In Light of COVID-19
March 25, 2020
Conference of State Bank Supervisors President and CEO John W. Ryan sent a letter to Federal Reserve Board Governor Jerome Powell and U.S. Treasury Secretary Steven Mnuchin encouraging the creation of a liquidity facility to support mortgage servicers.
CSBS Supports FDIC Request to Delay Certain FASB Rules Due to COVID-19
March 20, 2020
“State regulators believe banks are well positioned and ready to work with their customers as the global COVID-19 pandemic impacts their communities. We fully support FDIC Chairman McWilliams’ request to FASB to address two significant impediments. Allowing institutions to delay their transition to the Current Expected Credit Losses (CECL) methodology will give banks more time to focus on their customers. In addition, providing clarity on the treatment of COVID-19 related loan-modifications for accounting purposes would encourage banks to help their customers in this time of need.”
SBA Should Consult With CSBS Before Acting on Nonbank Lending
March 13, 2020
CSBS today sent a comment letter to the U.S. Small Business Administration (SBA) recommending that the agency consult with state regulators before implementing proposed rules that would update SBA loan program rules for nonbank institutions.
Department of Treasury
Treasury Releases Guidance on Payroll Support to Aid Airline Industry Employees, and on Loans to Airline Industry and Businesses Critical to National Security, Pursuant to CARES Act
March 30, 2020
The U.S. Department of the Treasury published resources to assist eligible businesses in applying for payroll support to enable the continued payment of employee wages, salaries, and benefits, and for loans pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Department of Labor
U.S. Department Of Labor Adds To Guidance for Workers and Employers Explaining Paid Sick Leave and Expanded Family and Medical Leave Benefits Under the Families First Coronavirus Response Act
March 28, 2020
The U.S. Department of Labor’s Wage and Hour Division (WHD) published more guidance to provide information to employees and employers about how each will be able to take advantage of the protections and relief offered by the Families First Coronavirus Response Act (FFCRA) when it goes into effect on April 1, 2020. The latest round of guidance includes questions and answers addressing critical issues such as the definition of a “health care provider,” and the scope of the small business exemption for purposes of exclusion from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, as well as whether public sector employees may take paid family and medical leave. In addition, WHD posted its two recently released posters and fact sheets in Spanish on its COVID-19 website.
U.S. Department Of Labor Announces Additional Guidance Explaining Paid Sick Leave and Expanded Family and Medical Leave Under The Families First Coronavirus Response Act
March 26, 2020
The new guidance includes two new posters, one for federal workers and one for all other employees, that will fulfill notice requirements for employers obligated to inform employees about their rights under this new law. It also includes questions and answers about posting requirements, and a Field Assistance Bulletin describing WHD’s 30-day non-enforcement policy.
U.S. Department of Labor Invites Stakeholders to a National Online Dialogue on Paid Family and Medical Leave and Paid Sick Leave Under the Families First Coronavirus Response Act
March 25, 2020
The U.S. Department of Labor is hosting a national online dialogue, Providing Expanded Family and Medical Leave to Employees Affected by COVID-19, to help employers and workers understand their responsibilities and rights, respectively, under the Families First Coronavirus Response Act (FFCRA).
U.S. Department Of Labor Publishes Guidance Explaining Paid Sick Leave And Expanded Family and Medical Leave Under The Families First Coronavirus Response Act
March 24, 2020
The guidance – provided in a Fact Sheet for Employees, a Fact Sheet for Employers and a Questions and Answers document – addresses critical questions, such as how an employer must count the number of their employees to determine coverage; how small businesses can obtain an exemption; how to count hours for part-time employees; and how to calculate the wages employees are entitled to under this law.
U.S. Department of Labor Announces Availability of Up to $100 Million In National Health Emergency Dislocated Worker Grants in Response to COVID-19 Outbreak
March 18, 2020
The U.S. Department of Labor announced the availability of up to $100 million for Dislocated Worker Grants (DWGs) to help address the workforce-related impacts of the public health emergency related to COVID-19, also known as novel coronavirus.
USDA and DOL Announce Information Sharing to Assist H-2A Employers in Identification of Workers Eligible to Fulfill Critical Workforce Needs During COVID-19 Pandemic
March 19, 2020
U.S. Secretary of Agriculture Sonny Perdue announced a partnership between the U.S. Department of Agriculture (USDA) and the U.S. Department of Labor (DOL) to help facilitate the identification of foreign and domestic workers that may be available and eligible to transfer to other U.S. agricultural sector employers to fulfill critical workforce needs within the U.S. under existing regulatory authority during the COVID-19 pandemic.
U.S. Department of Labor Takes Actions to Facilitate Response Efforts For COVID-19 Outbreak
March 18, 2020
The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) today issued a National Interest Exemption memorandum to facilitate response efforts for COVID-19, also known as novel coronavirus. In view of the special circumstances in the national interest presented by the novel coronavirus outbreak, OFCCP will grant a limited, three-month exemption and waiver from some of the requirements of the laws administered by the agency.
in any Job Corps center at this time.
U.S. Department of Labor Announces New Guidance on Unemployment Insurance Flexibilities during COVID-19 Outbreak
March 12, 2020
The U.S. Department of Labor announced new guidance outlining flexibilities that states have in administering their unemployment insurance (UI) programs to assist Americans affected by the COVID-19 outbreak. Under the guidance, federal law permits significant flexibility for states to amend their laws to provide UI benefits in multiple scenarios related to COVID-19.
Equal Employment Opportunity Council
EEOC Continues to Serve the Public During COVID-19 Crisis
March 30, 2020
The EEOC has closed its physical offices to the public and implemented agency-wide expanded telework. But our work continues remotely, across the private and federal sectors, and in our efforts educate the public about their workplace rights and responsibilities. The EEOC's private sector litigation continues, in accordance with the rules of the courts where the cases are filed.
EEOC Answers Questions about the Pandemic and Antidiscrimination Laws in Recorded Webinar
March 27, 2020
The U.S. Equal Employment Opportunity Commission (EEOC) today posted a webinar addressing questions arising under any of the Federal Equal Employment Opportunity Laws and the COVID-19 pandemic. The webinar answers questions submitted by the public about how to respond to the COVID-19 pandemic in light of the federal employment nondiscrimination laws the EEOC enforces - including the American's with Disabilities Act, the Age Discrimination in Employment Act, Title VII, and GINA.
What You Should Know About the ADA, the Rehabilitation Act, and COVID-19
March 19, 2020 (Update)
The EEOC enforces workplace anti-discrimination laws including the Americans with Disabilities Act (ADA) and the Rehabilitation Act, including the requirement for reasonable accommodation and rules about medical examinations and inquiries. The ADA and Rehabilitation Act rules continue to apply, but they do not interfere with or prevent employers from following the guidelines and suggestions made by the CDC or state/local public health authorities about steps employers should take regarding COVID-19. Employers should remember that guidance from public health authorities is likely to change as the COVID-19 pandemic evolves. Therefore, employers should continue to follow the most current information on maintaining workplace safety.
Message From EEOC Chair Janet Dhillon on National Origin and Race Discrimination During the COVID-19 Outbreak
Crises like the COVID-19 pandemic can bring out the best and worst in people. We have seen many examples of people rising to the occasion, helping others in need, sometimes at great risk or sacrifice to themselves. Sadly, there have also been reports of mistreatment and harassment of Asian Americans and other people of Asian descent. In the workplace, these actions can result in unlawful discrimination on the basis national origin or race.
Occupational Safety and Health Administration
U.S. Department of Labor Issues Temporary Enforcement Guidance for Respirator Fit-Testing in Healthcare during COVID-19 Outbreak
March 14, 2020
The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has issued new temporary guidance regarding the enforcement of OSHA’s Respiratory Protection standard. This guidance is aimed at ensuring healthcare workers have full access to needed N95 respiratory protection in light of anticipated shortages.
U.S. Department of Labor Offers Guidance For Preparing Workplaces for Coronavirus
March 9, 2020
The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) published “Guidance on Preparing Workplaces for COVID-19” to help companies respond in the event of coronavirus in the workplace. The guidance was developed in collaboration with the U.S. Department of Health & Human Services (HHS).
Occupational Safety and Health Administration COVID-19 Webpage
This webpage provides information for workers and employers about the evolving coronavirus outbreak first identified in Wuhan City, Hubei Province, China. The information includes links to interim guidance and other resources for preventing exposures to, and infection with, the novel coronavirus—now officially named COVID-19. Topics include Hazard Recognition, Medical Information, Standards, Control and Prevention, Worker’s Rights, and additional resources.
State Agencies
New York Department of Financial Services
Department of Financial Services Adopts Emergency Regulation Mandating Deferrals of Premium Payments for life and Property and Casualty Insurance
March 30, 2020
The New York State Department of Financial Services (DFS) today adopted an emergency regulation requiring New York State regulated issuers of life insurance and annuity contracts, property and casualty insurers and premium finance agencies to provide relief to New York consumers and businesses experiencing financial hardship due to COVID-19. Consumers experiencing financial hardship due to COVID-19 may defer paying life insurance premiums for ninety (90) days. Consumers and small businesses experiencing financial hardship due to COVID-19 may defer paying premiums for property and casualty insurance for sixty (60) days. Premium finance agencies are required to provide the same relief as insurers.
International
European Commission
Coronavirus: Commission presents practical guidance to ensure the free movement of critical workers
March 30, 2020
The European Commission issued new practical advice to ensure that mobile workers within the EU, in particular those in critical occupations to fight the coronavirus pandemic, can reach their workplace. This includes but is not limited to those working in the health care and food sectors, and other essential services like childcare, elderly care, and critical staff for utilities.
Guidelines (PDF will automatically download)
Coronavirus: Commission issues questions and answers to help increase production of safe medical supplies
March 30, 2020
The European Commission is making available guidance to assist manufacturers in ramping up production of essential medical equipment and material in three areas: the production of masks and other personal protective equipment (PPE), leave-on hand cleaners and hand disinfectants and 3D printing in the context of the coronavirus outbreak.
Statement from Commission President von der Leyen on proposals to fight the economic effects of the coronavirus crisis
March 28, 2020
“The European Council tasked the Eurogroup to come up with proposals within the next weeks. The Commission will participate in these discussions and stands ready to assist, if supported by the Eurogroup. This is required since the fiscal space for new instruments is limited as we are in the last year of the MFF…”
Coronavirus: Commission boosts budget for repatriation flights and rescEU stockpile
March 27, 2020
The European Commission proposed to make €75 million from the EU budget available to help Member States repatriate EU nationals and to increase the budget of the RescEU medical stockpile.
State aid: Commission amends Short-term export-credit insurance Communication in light of economic impact of coronavirus outbreak
March 27, 2020
The European Commission decided to temporarily remove all countries from the list of “marketable risk" countries under the Short-term export-credit insurance Communication. This will make public short-term export credit insurance more widely available in light of the current crisis linked to the coronavirus outbreak. The amendment further expands on the flexibility introduced by the Commission's State aid Temporary Framework with respect to the possibility by State insurers to provide insurance for short-term export-credit.
Coronavirus: Commission Statement on consulting Member States on the proposal to extend State aid Temporary Framework
March 27, 2020
The European Commission sent to Member States for consultation a draft proposal to extend the State aid Temporary Framework adopted on 19 March 2020 to support the economy in the context of the coronavirus outbreak.
Coronavirus: Commission issues guidance to ensure essential freight keeps moving by air
March 26, 2020
The European Commission calls on EU Member States to support air cargo operations during the coronavirus crisis. The new guidance recommends operational and organisational steps to keep essential transport flows moving, including medical supplies and personnel.
Coronavirus: harmonised standards for medical devices to respond to urgent needs
March 25, 2020
The European Commission adopted decisions on harmonised standards which will allow manufacturers to place on the market high performing devices to protect patients, health care professionals and citizens in general. The standards will facilitate a faster and less expensive conformity assessment procedure.
Coronavirus: Commission issues guidelines to protect critical European assets and technology in current crisis
March 25, 2020
The European Commission issued guidelines to ensure a strong EU-wide approach to foreign investment screening in a time of public health crisis and related economic vulnerability. The aim is to preserve EU companies and critical assets, notably in areas such as health, medical research, biotechnology and infrastructures that are essential for our security and public order, without undermining the EU's general openness to foreign investment.
Coronavirus: Commission stands ready to continue supporting EU's agri-food sector
March 25, 2020
Following the outbreak of coronavirus, the European Union's agri-food sector is showing its resilience and continues to provide Europeans with high quality and safe food. Nonetheless, farmers and producers are facing difficulties and increasing pressure. Ensuring food security and an effective food supply chain across the continent remains one of the Commission's priorities.
Coronavirus: Commission bid to ensure supply of personal protective equipment for the EU proves successful
March 24, 2020
The joint procurement of personal protective equipment launched by the European Commission to address the coronavirus crisis has proven successful.
Coronavirus: Commission presents practical guidance to ensure continuous flow of goods across EU via green lanes
March 23, 2020
The European Commission issued new practical advice on how to implement its Guidelines for border management, in order to keep freight moving across the EU during the current pandemic. To ensure that EU-wide supply chains continue to operate, Member States are requested to designate, without delay, all the relevant internal border-crossing points on the trans-European transport network (TEN-T) as ‘green lane' border crossings.
Coronavirus: Commission proposes to activate fiscal framework's general escape clause to respond to pandemic
March 20, 2020
The European Commission proposed the activation of the general escape clause of the Stability and Growth Pact (SGP) as part of its strategy to respond quickly, forcefully and in a coordinated manner to the coronavirus pandemic. Once endorsed by the Council, it will allow Member States to undertake measures to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework.
Coronavirus: European standards for medical supplies made freely available to facilitate increase of production
March 20, 2020
In the context of the Coronavirus crisis, the European Commission is working with industry and Member States to maximise the availability of masks, gloves, gowns and other medical supplies. Efforts include increasing production by existing manufacturers, facilitating imports and activating alternative ways of producing equipment.
Questions and answers: Commission proposes activating fiscal framework's general escape clause to respond to coronavirus pandemic
March 19, 2020
State aid: Commission adopts Temporary Framework to enable Member States to further support the economy in the COVID-19 outbreak
March 19, 2020
The European Commission has adopted a Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the COVID-19 outbreak. Together with many other support measures that can be used by Member States under the existing State aid rules, the Temporary Framework enables Member States to ensure that sufficient liquidity remains available to businesses of all types and to preserve the continuity of economic activity during and after the COVID-19 outbreak.
COVID-19: Commission provides guidance on EU passenger rights
March 18, 2020
The European Commission published guidelines to ensure EU passenger rights are applied in a coherent manner across the EU.
COVID-19: Commission presents guidelines for border measures to protect health and keep goods and essential services available
March 16, 2020
The European Commission presented guidelines to Member States on health-related border management measures in the context of the COVID-19 emergency. The aim is to protect citizens' health, ensure the right treatment of people who do have to travel, and make sure essential goods and services remain available.
Commission moves to ensure supply of personal protective equipment in the European Union
March 15, 2020
The European Commission has taken steps to protect the availability of supplies of personal protective equipment (PPE) by requiring that exports of such equipment outside of the European Union are subject to an export authorisation by Member States.
European Banking Authority
EBA provides clarity to banks and consumers on the application of the prudential framework in light of COVID-19 measures
March 25, 2020
The European Banking Authority (EBA) issued a second statement to explain a number of additional interpretative aspects on the functioning of the prudential framework in relation to the classification of loans in default, the identification of forborne exposures, and their accounting treatment. These clarifications will help ensure consistency and comparability in risk metrics across the whole EU banking sector, which are crucial to monitor the effects of the current crisis. The EBA also reminds financial institutions of their consumer protection obligations, temporarily lifts some reporting obligations for payment service providers (PSPs), and calls on PSPs to raise their contactless payment thresholds to the legal limit.
Statement on consumer and payment issues in light of COVID19
Further actions to support banks’ focus on key operations: postponed EBA activities
Bank of England
Extension of the Contingent Term Repo Facility (CTRF)
March 30, 2020
The Bank of England announced that it will continue to offer the Contingent Term Repo Facility (CTRF) on a weekly basis through April 2020.
Bank Rate maintained at 0.1% - March 2020
March 26, 2020
Our MPC voted unanimously to maintain Bank Rate at 0.1%. The committee also voted unanimously to continue with the programme of £200 billion of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, to take the total stock of these purchases to £645 billion.
Agents' summary of business conditions - 2020 Q1
March 30, 2020
The Covid-19 (Coronavirus) pandemic has caused a sudden, rapid decline in economic activity in recent weeks. The situation has been described by many Agency contacts as being worse than the financial crisis in 2008. Due to fast-moving developments since the outbreak of the virus, this publication focuses on intelligence gathered by the Bank’s Agents during the first few weeks of March. Prior to that point, companies had generally reported some modest improvement in some parts of the economy and the outlook. That is reflected in the Agents’ scores released alongside this publication, which are based on information gathered during January and February.
Latest results from the Decision Maker Panel survey—Expected impact of Covid-19 on sales
March 26, 2020
The spread of coronavirus (Covid-19) was expected to have a large impact on the sales of UK businesses. In the March DMP survey, Panel members were asked to attach probabilities to five different possible outcomes for how they expect the sales of their business to be affected over the next year. The average probability of a negative impact was estimated at 71% (Chart 1). There was thought to be a 39% chance of a large negative impact (of more than 10%) and a 32% chance of a smaller negative impact (of less than 10%). There was a 22% chance of no impact and a 7% chance of a positive effect. However these sales impacts should be temporary.
Joint letter to the UK banks from HM Treasury, the Bank of England, and the FCA
March 25, 2020
A letter from the Chancellor, the Governor of the Bank of England, and the CEO of the FCA to the CEOs of the UK Banks on the subject of COVID-19 and bank lending
Activation of the Contingent Term Repo Facility
March 24, 2020
The Bank of England announced the activation of the Contingent Term Repo Facility (CTRF). CTRF operations will run on 26 March 2020 and 2 April 2020, in addition to the Bank’s regular liquidity insurance facilities including the Indexed Long-Term Repo (ILTR) and Discount Window Facility (DWF).
Financial Policy Summary and Record - March 2020
March 24, 2020
The Bank of England’s Financial Policy Committee (FPC) assesses the outlook for financial stability by identifying the risks faced by the financial system and weighing these against the resilience of the system.
Covid Corporate Financing Facility (CCFF): information for those seeking to participate in the scheme
March 20, 2020
HM Treasury and the Bank of England published guidance for companies, and banks acting on behalf of companies, that would like to participate in their Covid Corporate Financing Facility (CCFF).
Bank of England announces supervisory and prudential policy measures to address the challenges of Covid-19
March 20, 2020
The Bank of England (‘Bank’) and Prudential Regulation Authority (‘PRA’) announced a number of measures aimed at alleviating operational burdens on PRA-regulated firms (‘firms’) and Bank-regulated financial market infrastructures (‘FMIs’) in the wake of the Covid-19 outbreak. These measures will provide flexibility to help firms and FMIs maintain their safety and soundness and deliver the critical functions they provide to the economy.
Asset Purchase Facility (APF): Asset Purchases and TFSME
March 19, 2020
The UK Monetary Policy Committee judged that a further package of measures was warranted to meet its statutory objectives. It therefore voted unanimously to increase the Bank of England’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to a total of £645 billion, financed by the issuance of central bank reserves; and to reduce Bank Rate by 15 basis points to 0.1%. The Committee also voted unanimously that the Bank of England should enlarge the Term Funding Scheme with additional incentives for SMEs (TFSME).
HM Treasury and the Bank of England launch a Covid Corporate Financing Facility (CCFF)
March 17, 2020
HM Treasury and the Bank of England are today announcing a Covid Corporate Financing Facility (CCFF) to provide additional help to firms to bridge through Covid 19-related disruption to their cash flows.
Bank of England Prudential Regulatory Authority
Statement on exposure value for internal models method counterparty credit risk
March 30, 2020
Some firms have recently experienced significant moves in Counterparty Credit Risk (CCR) exposures. In part this is attributable to large margin calls following significant intraday market price movements, which can lead to material but temporary overnight unsecured exposures on collateralised portfolios. The Capital Requirements Regulation (CRR) does not preclude firms using the Internal Models Method (IMM) to measure the exposure value including collateral which has not yet settled at the time of calculation. Where a shortfall between the collateral for which a firm has called and the collateral which has settled arises as a result of the ordinary collateral settlement cycle, including this shortfall in the calculation of exposure may lead to unwarranted volatility in the exposure value and therefore unwarranted volatility in RWAs.
Statement on VAR back-testing exceptions temporary approach
March 30, 2020
The exceptional levels of market volatility over the past few weeks have led to an elevated level of VAR back-testing exceptions across the industry. In order to mitigate the possibility of excessively pro-cyclical market risk capital requirements through the automatic application of a higher VAR multiplier (ie mc and ms, as defined in CRR Article 366), the PRA will allow firms – on a temporary basis – to offset increases due to new exceptions through a commensurate reduction in risks-not-in-VAR (RNIV) capital requirements. This approach will be reviewed by the PRA after 6 months.
Letter from Sam Woods ‘Covid-19: IFRS 9, capital requirements and loan covenants’
March 26, 2020
The Prudential Regulatory Authority is pursuing a range of regulatory and supervisory measures to alleviate the financial stability impact of the Coronavirus (Covid-19) and maintain the safety and soundness of authorised firms. These measures are aimed at ensuring that banks are able to continue to lend to households and businesses, support the real economy, and provide robust and consistent market disclosures. This letter sets out our guidance in three areas: (i) consistent and robust IFRS 9 accounting and the regulatory definition of default; (ii) the treatment of borrowers who breach covenants due to Covid-19; and (iii) the regulatory capital treatment of IFRS 9.
Joint statement by the Financial Conduct Authority, Financial Reporting Council and Prudential Regulatory Authority
March 26, 2020
The Financial Conduct Authority (FCA), Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) have announced a series of actions and issued a series of statements that are intended together to: (a) ensure that information continues to flow to investors (and thereby supports the continued functioning of the UK’s capital markets); (b) help companies preparing and auditors auditing financial statements in the current uncertain climate; and (c) help market participants and lenders to respond appropriately to what is likely to be the new normal in terms of audit report modifications and loan covenant breaches.
Statement by the FCA allowing companies an extra 2 months to publish their audited financial reports
Guidance from the PRA on how firms can assess expected loss provisions under IFRS
Guidance from the FRC for audit firms seeking to overcome challenges in obtaining audit evidence
Statement by the Prudential Regulatory Authority on bank, building society and credit union branches remaining open following updated Covid-19 guidance
March 24, 2020
In line with the latest UK Government announcement, the Prudential Regulation Authority’s current advice to banks, building societies and credit unions is that they should keep branches and contact centres open, where possible, as they are deemed essential for civil and commercial functions. We also encourage banks and building societies to take the necessary precautions to keep their staff and customers safe, in particular following NHS guidance.
Covid-19 regulatory reporting amendments
March 23, 2020
This statement outlines the Prudential Regulation Authority’s approach to regulatory reporting for UK insurers in response to Covid-19 and EIOPA’s ‘Recommendations on supervisory flexibility regarding the deadline of supervisory reporting and public disclosures – coronavirus/Covid-19’, published on 20 March 2020.
Statement by the PRA on key financial workers who are critical to the Covid-19 response
March 20, 2020
A key financial worker at a dual regulated or Financial Conduct Authority solo-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 PRA’s only expect a limited number of people to be identified as being key financial workers.
UK Financial Conduct Authority
FCA statement on short selling bans and reporting
March 31, 2020 (update)
On 16 March 2020, the European Securities and Markets Authority (ESMA) issued a decision to temporarily amend the threshold for notifying net short positions to Competent Authorities under the SSR from 0.2% of issued share capital to 0.1%. We confirmed that this decision would apply in the UK. However, we stated that systems changes would be required and firms should continue to report at the previous thresholds until further notice. We can now confirm that the required changes to our systems have been made.
Short selling restrictions and prohibitions
March 31, 2020 (update)
The Financial Conduct Authority announces temporary bans on net short positions by the Austrian Financial Market Authority (Austrian FMA), COMISIÓN NACIONAL DEL MERCADO DE VALORES (CNMV), Italian Commissione Nazionale per le Società e la Borsa (CONSOB), AUTORITE DES MARCHES FINANCIERS (AMF), INANCIAL SERVICES AND MARKETS AUTHORITY (FSMA), and Hellenic Capital Market Commission (HCMC)
Work-related travel – responsibilities of Senior Managers in designating employees who are unable to work from home during the COVID-19 pandemic.
March 27, 2020
The Financial Conduct Authority clarifies how firms should prioritise who should need to travel to the office and the responsibilities of Senior Managers in doing so.
FCA and PSR respond to the CMA’s guidance on business cooperation under competition law
March 27, 2020
Both the Financial Conduct Authority and Payment Systems Regulator are supportive of the Competition and Markets Authority’s guidance on its approach to business cooperation under competition law, which was published on 25 March 2020. Both regulators will take a consistent approach to their competition law enforcement activity in the financial services sector (under the Competition Act 1998 and/or the Treaty on the Functioning of the European Union).
Statement of Policy: Delaying annual company accounts during the coronavirus crisis
March 26, 2020
As part of a wider joint-initiative with the Financial Reporting Council (FRC) and the Prudential Regulation Authority (PRA), the Financial Conduct Authority announced temporary relief for listed companies facing the challenges of corporate reporting during the coronavirus crisis. This temporary relief will permit listed companies which need the extra time to complete their audited financial statements an additional 2 months in which publish them.
FCA’s expectations on financial resilience for FCA solo-regulated firms during COVID-19
March 26, 2020
The Financial Conduct Authority wants to see firms to continue operating in this challenging period, and intends to provide flexibility to regulated firms where possible to ensure this. Capital and liquidity buffers are there to be used in times of stress. Firms who have been set buffers can use them to support the continuation of the firm’s activities.
Avoid coronavirus scams
March 26, 2020
The Financial Conduct Authority released guidance potential coronavirus (Covid-19) scams, how they could affect you, and how to protect yourself.
Banks, building societies and credit unions – branch access for essential services during COOVID-19
March 25, 2020
Banks, building societies, the Post Office and credit unions are working closely with the Financial Conduct Authority, the Prudential Regulation Authority and HM Treasury to maintain branch access for essential services (such as counter services or supporting a bereavement), balancing the needs of their customers with the safety and welfare of staff. They urge customers to only visit branches where absolutely necessary. Recommended precautions, such as social distancing, to minimise the spread of coronavirus have been introduced in branches and customers are asked to respect these.
Impact of the coronavirus on firms’ LIBOR transition plans
March 25, 2020
The central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed and should remain the target date for all firms to meet. The transition from LIBOR remains an essential task that will strengthen the global financial system. Many preparations for transition will be able to continue
Statement on bank branch opening
March 24, 2020
In line with the latest UK Government announcement, the Financial Conduct Authority advises banks and building societies to keep branches and contact centres open, where possible, as they are deemed essential for civil and commercial functions. The FCA does encourage banks and building societies to take the necessary precautions to keep their staff and customers safe, in particular following National Health Service (NHS) guidance.
Statement on UK markets during COVID-19
March 23, 2020
While there has been significant volatility in market prices over the past weeks as a result of the impacts of coronavirus (Covid-19) and this may continue for a period, markets have continued to operate in an orderly fashion in the UK. Some European countries have introduced short selling bans, and, in line with the Financial Conduct Authority’s standard practice, they have followed those bans, where requested, in respect of shares for which relevant European National Competent Authorities (NCAs) are responsible. The FCA has not introduced such a ban.
FCA requests a delay to the forthcoming announcement of preliminary financial accounts due to COVID-19
March 21, 2020
The Financial Conduct Authority strongly requests all listed companies observe a moratorium on the publication of preliminary financial statements for at least two weeks. Investors in capital markets rely on trustworthy information on the companies whose instruments they trade. The unprecedented events of the last couple of weeks mean that the basis on which companies are reporting and planning is changing rapidly. It is important that due consideration is given by companies to these events in preparing their disclosures. Observing timetables set before this crisis arose may not give companies the necessary time to do this.
Key workers in financial services during COVID-19
March 20, 2020
A key financial worker at a dual-regulated, Financial Conduct Authority solo-regulated firm or Payment Systems 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. We only expect a limited number of people to be identified as being key financial workers.
FCA sets out new guidance for mortgage providers and for lenders taking part in the Coronavirus Business Interruption Loan Scheme
March 20, 2020
The Financial Conduct Authority has published new guidance for mortgage lenders and administrators, and small business lenders. This supports the announcements made by the Chancellor earlier this week.
FSA/FCA Interest Rate Hedging Products Lessons Learned Review deadline extended until early 2021
March 20, 2020
John Swift QC, the Independent Reviewer examining the Financial Services Authority (FSA) and Financial Conduct Authority (FCA)'s supervisory intervention in relation to Interest Rate Hedging Products (IRHPs), has informed the FCA that the deadline for submission of his report in relation to the Review must be extended until early 2021 as a result of necessary precautions to be taken in response to the COVID-19 virus.
OPBAS publishes report on progress and themes from 2019
March 19, 2020
The Financial Conduct Authority’s Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has today released its latest report on progress made in tackling money laundering over the past year. Among the key findings are that the accountancy and legal professions have made strong improvements in their supervision of anti-money laundering (AML) work. However, some professional body supervisors (PBSs) are still lagging behind their peers and must continue to raise their standards further.
FCA sets out expectations for general insurance firms during coronavirus (Covid-19) pandemic
March 19, 2020
The Financial Conduct Authority has set out expectations for general insurance firms and provided information for consumers about what they should see from their insurance provider during the coronavirus pandemic. The FCA has provided information about a number of topics including travel, motor and home, and private medical insurance. It also provides clarification in relation to suspension of products and policy renewals.
Insurance and coronavirus (Covid-19): our expectations of firms
Insurance and coronavirus (Covid-19): information for consumers
Statement on property fund suspensions during COVID-19
March 18, 2020
Certain Standing Independent Valuers have determined that there is currently material uncertainty over the value of commercial real estate (CRE). In such situations, a fair and reasonable valuation of CRE funds cannot be established. As a result, some managers of open-ended CRE funds have temporarily suspended dealing in units of these funds and others are likely to follow for the same reason. Suspensions can be used by managers of open-ended funds, in line with their obligations under applicable regulations. In these circumstances, suspension is likely to be in the best interests of fund investors.
FCA information for firms on coronavirus (Covid-19) response
March 17, 2020
The Financial Conduct Authority has set up this continuously-updated page with information for firms on updated FCA guidance and expectations as the COVID-19 situation develops. Topics include payment and retail banking firm expectations, SM&CR responsibilities, regulatory change, impact on consumers, insurance products, etc.