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Identifying Key Workers in Financial Services

The FCA has set out the steps firms should take to help identify key workers in financial services.

On 19 March 2020, to help prevent the spread of coronavirus (COVID-19), the government 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. Children that need to attend will include those whose parents or guardians are critical to the coronavirus response meaning that they cannot safely be cared for at home. In financial services, key financial workers are those that are needed for the provision of essential financial services.

The FCA states, “A key financial worker at a dual-regulated, FCA solo-regulated firm or PSR-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 FCA has provided the following guidance for firms when identifying those who are 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.”

On 27 March, the FCA released a further update on work-related travel and Senior Managers In it, the regulator clarifies its position and reminds firms that they should all be clear that the coronavirus outbreak constitutes a public health emergency. It strongly supports the government’s measures aimed at protecting the public by ensuring that only those workers who cannot work from home, continue to travel to and from work.

It is recommended that Chief Executive Officers (SMF1s) are accountable for identifying which of their employees are unable to perform their jobs from home, and have to travel to the office or business continuity site. Where firms do not have an SMF1 Chief Executive Officer, this will instead be the most relevant member of the senior management team.

The FCA expects that “the total number of roles requiring an ongoing physical presence in the office or business continuity site to be far smaller than the number of workers needed to ensure all of a firm’s business activities continue to function on a business as usual basis.” It expects that employers will take all possible steps to allow their employees to work from home, including providing suitable IT and equipment to enable remote working.

The 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.

Those that would the FCA feel would not need to go into work or meet face to face are, for example:

  • financial advisers, as they can offer their services online or by phone
  • staff who can safely and securely trade shares and financial instruments from home
  • business support staff, such as those in IT where they can triage issues from home, unless they are looking after specific equipment or technology
  • claims management companies and those selling non-essential goods and credit

The FCA also states, “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. We recommend 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.”

It is vital that firms follow and comply with the latest government advice for employers and businesses regarding coronavirus – click here to access it. Bear in mind that the coronavirus situation continues to change rapidly, so it is important to stay up to date.

About the author

Ash Patel

Ash is Managing Director at RWA. He has over 15 years’ experience in the legal and compliance field and ten years in broker sales and leadership roles in national and global insurance firms.

He is highly skilled in the application of risk-based regulation, working closely with businesses at executive and board level to develop commercially viable, compliant systems and controls. Ash is adept in providing solutions-based interpretations of the FCA’s technical standards and facilitating the transfer of compliance skills and education needed for businesses to self-manage their own compliance and training needs.