April 1, 2020 / 7:29 AM / 2 months ago

Ask for a selfie: UK financial watchdog eases rules in pandemic

LONDON (Reuters) - Financial firms can ask customers for a selfie to check their identity, Britain’s markets watchdog said in a bid to ease burdens on staff having to work from home during the coronavirus lockdown.

A man wearing a protective mask sits along the Southbank in front of the City of London financial district during rush hour, as the number of Coronavirus cases grow around the world, in London, Britain, March 17, 2020. REUTERS/Hannah McKay

The Financial Conduct Authority (FCA) said it has received hundreds of requests from trade associations for adaptions to its rules.

But some were “opportunistic” and the watchdog said it will reflect on what this says about the firms involved or conduct in the sector.

FCA interim chief executive Christopher Woolard said in a public letter to heads of retail financial services firms that the pandemic affects the operational resilience of firms as staff work from home in volatile market conditions.

“It also brings with it the need to protect consumers,” Woolard said in his letter sent late on Tuesday.

Restrictions on non-essential travel affect a firm’s ability to make compulsory anti-money laundering checks on customers, but Woolard said firms can be flexible.

Firms could accept scanned documentation sent by e-mail, or ask clients to submit ‘selfies’ from their smartphone or videos, the FCA said. They could also send codes to a customer’s address to validate access to accounts.

Portfolio management services must inform customers each time their holdings drop by 10% or more in value since their last statement.

Firms have raised concerns about the impact on consumers and the operational burden of this in a highly volatile market where there have been frequent big swings in prices.

Woolard said that until the start of October, the FCA will not take enforcement action if a firm has issued at least one notification within the current reporting period, and where firms later provide general updates on websites or social media.

The FCA also paused work on tightening rules and advice around pensions.

Britain’s government has unveiled measures like loans and guarantees to keep firms afloat through what the Bank of England has said would be a temporary shock.

Woolard said these schemes can be used to help firms plan for how they will meet debts as they fall due and remain solvent in the immediate period.

“Government loans cannot, however, be used to meet capital adequacy requirements as they do not meet the definition of capital,” Woolard said.

Reporting by Huw Jones; Editing by Raissa Kasolowsky

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