Financial Services Speedread 24 March 2022 edition

1. European Commission publishes proposal to amend CSDR

On 16 March 2022, the European Commission published a legislative proposal to amend the Central Securities Depositaries Regulation ("CSDR"). This follows a report published by the European Commission in July 2021 in relation to the operation of the regime and an announcement that aspects of the settlement discipline (the buy-in regime) would be decoupled from the other parts of the settlement regime (such as cash penalties), owing to implementation concerns.

Key aspects of the proposal include the following:

• re-introducing mandatory buy-ins by means of an implementing act and to provide that such rules should apply only where certain conditions are met and where the application of mandatory buy-in is proportionate;
• introducing a pass-on mechanism where only the original failing participant in the chain will be made the addressee of the claim;
• empowering the European Commission to be given the power to temporarily suspend the application of mandatory buy-ins in certain exceptional situations;
• introducing an end-date to the grandfathering clause concerning third country Central Securities Depositaries ("CSDs") (this currently allows third country CSDs that provided services before the CSDR came into force to continue doing so without needing to be recognised) so that these CSDs will be required to notify ESMA when they are providing core services in the EU;
• adjusting the conditions under which CSDs can access banking services, enabling them to offer settlement services for a broader range of currencies; and
• establishing colleges where a CSD is passported in other Member States and where it is part of a corporate group comprising two or more CSDs authorised in at least two Member States.

The European Parliament and Council will now consider the legislative proposal.

2. ESMA publishes its assessment and recommendations on the European Commission's proposal to amend MiFIR

On 15 March 2022, ESMA published its assessment of the European Commission's MiFIR review proposal (see our FSS edition 9 December 2021 for further details).

While ESMA is strongly supportive of the main elements of the review proposal in relation to consolidated tape providers ("CTPs"), it sets out several concerns. It regards the current timetable for CTP selection and the proposed fall-back clause as impractical. Further, ESMA highlights drafting issues in relation to the authorisation of CTPs and inconsistencies between the scope of the derivatives CTP and the scope of the transparency requirements.
ESMA is also concerned that changes to the equity and non-equity transparency regime are overly complex and may not be appropriate to all asset classes, particularly derivatives.

ESMA recommends reducing the complexity and scale of reporting requirements in order to reduce compliance costs while ensuring quality of reported data. ESMA suggests this is achieved by replacing the ToTV concept with the Systemic Internaliser ("SI") approach. Under this system, MiFIR obligations would apply to derivatives belonging to the same sub-asset class of derivatives for which an investment firm is an SI.

3. FCA publishes update to the ancillary activities exemption (market share test) for commodity derivatives

On 14 March 2022, the FCA published an update confirming that it will not be publishing the data to allow firms to calculate the market share test under the ancillary activities exemption for commodity derivatives.

Under the ancillary activities exemption, firms who trade in commodity derivatives, emission allowances and emission allowance derivatives are exempt from authorisation if they meet certain criteria. As part of verifying that they fulfil these criteria, firms are currently required to perform the 'main business test' and the 'market share test'. Before February 2022, firms relied on data from ESMA to calculate the 'market share test', which will no longer be available as the relevant test has been removed in the EU.

The FCA is currently consulting on clarifications to the Perimeter Guidance Manual ("PERG") and UK MiFID RTS 20 to make clear that the 'market share test' is not a precondition to the ancillary activities exemption. In the meantime, firms can rely on Article 72J of the Regulated Activities Order which allows them to carry on their business without authorisation if there is no data available to carry out the test.

4. ESMA publishes updated guidance determining third-country trading venues for the purpose of transparency under MiFIR

On 14 March 2022, ESMA updated the Annex to its Opinion on determining transparency for third-country trading venues. Following EU sanctions on Russia, trading venues established in Russia are considered inactive from 14 March 2022 until further notice.

5. ESMA issues specific recommendations to CySEC over its supervision of cross-border investment activities

On 10 March 2022, ESMA published its peer review report on the supervision of cross-border activities of investment firms.

In the report, ESMA identified the need for National Competent Authorities ("NCAs") to "significantly improve" how they approach authorising, supervising and enforcing investment firms' cross border activities. ESMA reminded NCAs to calibrate their supervisory work to the specific nature, scale and complexity of an investment firm's cross-border activity.

Alongside the report, ESMA issued two specific recommendations to the Cyprus Securities and Exchange Commission ("CySEC"). This is the first time that an NCA has been issued with such recommendations. ESMA recommends that CySEC:

• increases the human resources it dedicates to supervising Cypriot investment firms' cross-border services; and
• strengthens its day-to-day supervision of firms and implements a revised annual supervisory plan so it can successfully monitor, promote and enforce compliance.

CySEC must make every effort to comply with the recommendations, and has two months to inform ESMA whether it has complied, or intends to comply, with the recommendations.

6. Ring-Fencing and Proprietary Trading Review Panel publish final report

On 15 March 2022, the Ring-Fencing and Proprietary Trading Review Panel (the "Panel") published its final report. The Panel was established to review the operation of the legislation concerning the Ring-Fencing Regime (the "Regime") (which separates core retail banking services from investment banking activities), and review banks’ proprietary trading activities. The Panel's view is that the ring-fencing regime is worth retaining at present, but needs to be more adaptable to better serve customers and address future risks.

Key recommendations include the following:

• banks with deposits below £25 billion should continue to be exempt from the Regime;
• banks with deposits above £25 billion that do not undertake excluded activities above a certain level should be exempt from the Regime, and only excluded activities above that level should be required to be placed in an non-ring-fenced bank;

• the Regime should be aligned with the resolution regime by, for example, introducing a new power for the authorities to remove banks from the Regime that are judged to be resolvable (the report suggests that HM Treasury could look into this);
• the restrictions on servicing relevant financial institutions ("RFIs") should be adjusted. For example, the definition of RFIs should be moved from legislation to the PRA Rulebook and an exemption should be introduced to allow ring-fenced banks ("RFBs") to provide banking services to smaller RFIs);
• RFBs should be permitted to establish operations or service customers outside the EEA; and
• risks from proprietary trading activities undertaken by banks in the UK should be monitored.

The UK Government has confirmed that the Treasury will set up a taskforce with the Bank of England to assess the Panel's recommendations and options for taking them forward, and will publish a response later in 2022.

7. BoE (PRA): Policy Statement: Operational Resilience and Operational Continuity in Resolution: CRR firms, Solvency II firms, and Financial Holding Companies (for Operational Resilience) (PS2/22)

On 11 March 2022, the PRA published a Policy Statement (PS2/22) outlining its final policy following feedback to its November 2021 consultation on Operational Resilience and Operational Continuity in Resolution (CP21/21). In CP2/21, the PRA proposed that certain group obligations in the Operational Resilience Part of the PRA Rulebook, relevant to CRR firms, should apply to CRR consolidation entities (meaning that the same substantive policy requirements would apply directly to these CRR consolidation entities, rather than to the individual firms in their groups). The PRA also proposed consequential amendments to Supervisory Statement (SS 1/21).

The PRA confirms that changes made since the publication of CP2/21 include the following:

• a new rule has been introduced requiring CRR consolidation entities to comply with the requirements in Chapter 8 within a reasonable time, and by no later than 30 June 2022;
• new rules have been introduced to the Operational Resilience Part requiring CRR consolidation entities to assess the ability of group members to remain within impact tolerances for their important group business services, and to ensure the CRR consolidation entity’s board approves the CRR consolidation entity’s assessment;
• SS1/21 has been amended to clarify where the policy applies to a CRR consolidation entity and to clarify that a threat to the viability of the group is one example of how risks could arise to UK financial stability or a firm’s safety and soundness in the context of important group business services; and
• SS1/21 has been amended to remove the reference to the requirement relating to strategies, processes and systems, and to add an expectation that CRR consolidation entities should have a regular dialogue with other members of its group regarding the assessment required under Rule 8.8 of the Operational Resilience Part applicable to CRR firms.

The PRA's rules and guidance on Operational Resilience will come into force on 31 March 2022. The rules on Operational Continuity in Resolution will come into force on 1 January 2023.

8. FCA publishes portfolio letters for retail mortgage lenders and non-bank mortgage lenders

On 11 March 2022, the FCA published two separate portfolio letters it sent to Retail Mortgage Lenders ("RMLs") and Non-Bank Mortgage Lenders ("NMLs") on 15 February 2022. Each letter outlines the FCA's assessment of the key risks of harm for RMLs' and NMLs' mortgage customers for the next two years and how such risks can be mitigated.

Both the RML and NML letter outline the following risks and recommendations:

• Supporting mortgage customers in financial difficulty: RMLs and NBLs should consider the FCA's tailored support guidance and the corresponding Handbook rules;
• Managing maturing interest-only (IO) mortgages: RMLs and NBLs should have strong governance arrangements in place and use a communication strategy that provides customers with sufficient time to act if there is a possibility of non-repayment;
• Responsible lending: RMLs and NBLs should not lower the level of affordability checks in light of increased interest rates;
• Libor transition: RMLs and NBLs relying on synthetic LIBOR should continue with their transition process;
• Treating customers in vulnerable circumstances fairly: RMLs and NBLs should ensure and be able to evidence the fair treatment of customers in vulnerable circumstances in their policies, processes, business models and culture; and
• Improving diversity and inclusion: when designing products and services, RMLs and NBLs should be responsive to the needs of their customers, provide them with flexible customers services and be communicative.

The NBL letter also includes a section on adequate financial resources and reminds NBLs to proactively monitor their prudential position and take the necessary steps to ensure they meet threshold conditions. NMLs should inform the FCA promptly if they are in any difficulty and ensure they maintain suitable wind-down plans.

In addition, both letters provide an update on what the FCA is doing regarding mortgage prisoners, its ESG strategy and Brexit. The NBL letter also provides an update on borrowers who are in difficulties recovering from arrears.

9. Court of Appeal ruling on Quinceare duty in Philipp v Barclays Bank UK plc

The Court of Appeal has permitted an appeal against a High Court judgement (in Philipp v Barclays Bank UK Plc UK [2021] EWHC 10 (Comm)) concerning the scope of the Quincecare duty. The Quincecare duty, first laid out in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 343, requires banks to refrain from executing a customer's instructions if the bank has reasonable grounds for believing that those instructions may be an attempt to misappropriate the customer's funds. The High Court had previously ruled that the duty did not extend to protecting the claimant (who was the subject of APP fraud) from her own actions where no suspicious circumstances had preceded the instruction (see our FSS edition dated 3 February 2021 for further details). The claimant appealed, arguing that a duty of care does exist where the customer is authorising the transfer.

The bank argued that the Quincecare duty only arose when instructions are given by an agent acting for the customer (usually an agent of a company). The Court of Appeal held that, as a matter of law, the Quincecare duty of care does not depend on whether the bank is instructed by an agent of the customer of the bank. It was held that the duty can apply with equal force in a case in which the instruction to the bank is given by a customer themselves who is the unwitting victim of APP fraud, provided the bank is on inquiry that executing the order would result in the customer's funds being misappropriated.

10. FCA publishes portfolio letter on custody and fund services supervision strategy

On 22 March 2022, the FCA issued a portfolio letter outlining the key risks that custody and fund services firms need to manage. Firms are expected to take necessary action required to ensure these risks are appropriately mitigated.
The letter identifies the four key areas of harm in the custody and fund services sector as:

• disruption to consumers and market participants, or the loss, compromise, or lack of availability of data, due to insufficient operational resilience or weak cyber controls;
• sub-standard oversight and control of client money and assets leading to financial losses for investors and/or an inability to recover assets efficiently;
• inadequate depositary oversight of fund managers, and failure to take reasonable care to ensure an authorised Collective Investment Scheme ("CIS") is managed in accordance with applicable rules and solely in the interests of the CIS and its unitholders; and
• inadequate oversight of business linked to high risk, illiquid or speculative investment products sold to retail investors, and failures to consider related consumer outcomes.

The FCA sets out its supervisory priorities and expectations of firms in the areas of: operational resilience and cyber; the protection of custody assets and money in line with the FCA's Client Assets (CASS) Sourcebook; depositary oversight and speculative and illiquid investments. Firms are also expected to prepare for market developments and regulatory change. The FCA states that this includes the Investment Firms Prudential Regime.

11. European Parliament briefing on amending the European Long-Term Investment Funds Regulation

On 17 March 2022, the European Parliament published a briefing on amending the European Long-Term Investment Funds ("ELTIFs") Regulation. ELTIFs are a category of alternative investment fund, whose managers are authorised as alternative investment fund managers under the Alternative Investment Fund Managers Directive 2011/61/EU. The European Commission has proposed amending ELTIF Regulation to encourage expansion of the market

Demand-side problems identified in the current system restrict investment in ELTIFs. While supply-side restrictions limit the available investment options, fund structures and investment strategies. Key proposals by the European Parliament are amends to:

• distinguishing between retail and professional investors to allow access to retail investors; and
• establishing an optional liquidity window mechanism for redemptions for early exit.

The draft report from the Committee on Economic and Monetary Affairs is expected soon.

No updates included for this fortnight's edition of the FSS.

12. UK Regulators make joint statement on sanctions and the cryptoasset sector regarding Russia and Belarus

On 11 March 2022, the FCA, the Bank of England and the Office of Financial Sanctions Implementation published a joint statement in relation to the financial sanctions that have been placed on Russia and Belarus in response to Russia's invasion of Ukraine.

The statement highlights the legal and regulatory obligation placed on all UK financial services firms, including cryptoasset providers, to ensure the sanctions are complied with.

The statement warns that it is a criminal offence to use cryptoassets to circumvent economic sanctions under the Money Laundering Regulations 2017 and the Sanctions Anti-Money Laundering Act 2018. The FCA have notified all registered cryptoasset firms and those with temporary registrations to highlight the sanctions application.

The statement also sets out steps to reduce the risk of sanctions evasion using cryptoassets. These include:

• updating business-wide and customer risk assessments to account for changes in the nature and type of sanctions measures;
• ensuring that customers are screened against relevant updated sanctions lists;
• identifying activity that is not in line with the customer profile or is otherwise suspicious and reporting to the nominated officer;
• engaging with public-private partnerships and private-private partnerships to gather insights on the latest typologies and additional controls; and
• looking for red flag indicators that suggest an increased risk of sanctions evasion.

13. ECJ issues preliminary ruling on the scope of the permitted disclosure of inside information

The Court of Justice of the EU ("ECJ") has delivered a preliminary ruling in a reference from the Cour d'appel de Paris in relation to the interpretation of inside information and the exception to the prohibition on disclosing inside information under provisions in the repealed Market Abuse Directive ("MAD") and the Market Abuse Regulation ("MAR").

The request was made following the decision of the Autorité des Marchés Financiers ("AMF") to impose a financial penalty on the applicant, a journalist, for disclosing information relating to the forthcoming publication of press articles reporting market rumours about the launch of takeover bids on companies listed on stock exchanges. Shortly before the articles had been published, several UK-resident individuals had purchased related shares and sold them the next day. The AMF discovered that the applicant had been in contact with one or more of the share purchasers on the day the articles had been published.

The ECJ's decision was that:

• information concerning the forthcoming publication of a press article reporting a market rumour in relation to an issuer of financial instruments is capable of constituting information "of a precise nature" for the purposes of inside information concept under Article 1(1) MAD;
• disclosure by a journalist, to one of his or her usual sources of information, of information relating to the forthcoming publication of a press article authored by him or her reporting a market rumour is made "for the purpose of journalism", within the meaning of Article 21 MAR where that disclosure is necessary for the purpose of carrying out a journalistic activity (which includes investigative work in preparation for publication); and
• Article 21 of MAR must be interpreted as meaning that a disclosure of inside information by a journalist is lawful where it must be regarded as being necessary for the exercise of his or her profession and as complying with the principle of proportionality.
  

No updates included for this fortnight's edition of the FSS.

No updates included for this fortnight's edition of the FSS.

14. ESAs warn consumers on the risks of cryptoassets

On the 17 March 2022, the European Supervisory Authorities (EBA, ESMA and EIOPA) (the "ESAs") issued a warning to consumers that many cryptoassets are high-risk and speculative. The ESAs highlight in their warning that crypto assets are not suited for most retail consumers as an investment or means of payment or exchange, and also highlighted the lack of recourse and protection available to consumers due to cryptoassets falling outside existing protection.

The key risks identified were:

• extreme price movements;
• misleading information;
• absence of protection;
• product complexity;
• fraud and malicious activities;
• market manipulation, lack of price transparency and low liquidity; and
• hacks, operational risks and security issues.

The ESAs also welcomed clarification by the Council of the European Union on the scope of restrictive measures against Russian and Belarusian entities and individuals with regards to cryptoassets.

15. ECB publishes report on the supervisory assessment of institutions' climate related and environmental risks disclosures

On the 14 March 2022, the ECB published a report assessing the progress 109 directly supervised European banks have made in disclosing their climate and environmental risks set out in the ECB's November 2020 guide. The ECB's assessment primarily focused on disclosures at the highest level of consolidation.

The report found that although there have been some improvements since the first assessment carried out in late 2020, no bank is at present fully meeting the supervisory expectations. Further, the overall level of transparency and disclosure of key metrics were judged to be insufficient, and the climate and risk disclosures that are currently occurring were found to be insufficiently substantiated.

The ECB sent individual feedback letters to the banks concerned explaining their main shortcomings, and is expecting decisive action.

Frank Elderson, a member of the executive board of the ECB and vice-chair of the supervisory board of the ECB delivered a speech following the delivery of the report which discussed its findings and the importance of transparent disclosures.

16. European Commission adopts the Taxonomy Complementary Climate Delegated Act

On 9 March 2022, the European Commission adopted the Taxonomy Complementary Climate Delegated Act.

The Act includes certain gas and nuclear activities in the list of economic activities covered by the EU Taxonomy Regulation. The Act also requires large listed financial and non-financial entities to disclose their business activities which relate to gas and nuclear activities.

The Act will now pass to the European Parliament and Council for scrutiny. If passed, it will enter into force on 1 January 2023.

17. HM Treasury and FCA Regulatory Perimeter meeting

On 18 March 2022, the record of the meeting between the Treasury and the FCA held in December 2021 to discuss the FCA's Perimeter Report was published.

Key areas requiring consideration going forward include:

• Buy Now Pay Later: the FCA will prioritise where there is consumer detriment or risk of detriment, and the Treasury will set out future steps based on the relevant Government consultation;
• cryptoassets: there is a need to create a regulatory environment for cryptoassets in which firms can innovate, while maintaining high regulatory standards and managing financial crime risks;
• ESG data and ratings: bringing ESG ratings providers into a regulatory framework has received support;
• online harms: the FCA recommended fraud and paid-for advertising be included in the Government’s Online Harms Bill; and
• extending the Senior Managers & Certification Regime (SMCR): the Treasury will consider the application of SMCR to recognised investment exchanges and credit ratings agencies.

18. Increase to Financial Ombudsman Award Limits

On 18 March 2022, the Financial Ombudsman Service announced that it would be increasing its maximum award limits from 1 April 2022 to:

• £375,000 for complaints referred to them on or after 1 April 2022 about acts or omissions by firms on or after 1 April 2019; and
• £170,000 for complaints referred to them on or after 1 April 2022 about acts or omissions by firms before 1 April 2019.

19. IOSCO Consultation Report: Retail Market Task Force

Increased participation in securities markets by retail investors may impact market trends and pricing. The Board of the International Organization of Securities Commissions ("IOSCO") has therefore launched a consultation seeking feedback from stakeholders on the regulatory implications for retail market conduct. The consultation is open until 23 May 2022.

Notable recent trends in retail behaviour include:

• increased volumes of retail trading, likely due to a combination of recent technological development, COVID 19 Pandemic, and increased participation of younger investors;
• increased fraudulent activity;
• use of social media and online platforms to promote scams;
• retail investors increasingly pushed to "digitalisation";
• "Gamification" methods used to attract retail investors and influence behaviour;
• rising concern over suitability of crypto-assets and platforms for retail investors; and
• rise of digital trading platforms and social media leading to high-risk gambling-type investment opportunities.

IOSCO note sthat being proactive is key to prevent harm to retail investors, with most members using product design and intervention powers to protect retail investors from risky product offerings. Traditional disclosure approaches, requiring entitles to adjust their point of sale in response to a change is circumstance are also widely used.

20. Lloyd's of London fines Atrium Underwriters Limited £1,050,000 for non-financial misconduct by employees

On 16 March 2022, Lloyd's of London published enforcement proceedings and a notice of censure against Atrium Underwriters Limited ("Atrium") relating to three charges of non-financial misconduct (including accusations of discrimination, harassment and bullying) by Atrium employees and the way in which Atrium responded to allegations of such misconduct. Atrium were fined £1,050,000 and ordered to pay costs of £562,713.50.

This is the largest such pecuniary fine issued by Lloyd's, illustrating the increasing severity with which market bodies and regulators are treating such allegations of non-financial misconduct in financial services firms.

21. ICE announces new SOFR benchmark

On 16 March 2022, ICE Benchmark Administration launched the ICE Term SOFR Reference Rate benchmark for use in financial instruments. SOFR is the Secured Overnight Financing Rate. ICE Term SOFR Rates are forward looking SOFR rates over one, three, six or twelve month periods calculated based on data from specified SOFR-linked interest rate derivative products.

22. The FCA publishes its response to the Complaints Commissioners Report into the oversight of London Capital and Finance Plc

On 15 March 2022, the FCA published its response to the Complaints Commissioner's Final Report dated 15 February 2022 (the "Report") into the FCA's oversight of London Capital and Finance Plc ("LCF").

The insolvency of LCF resulted in approximately 1,100 complaints being made to the Office of the Complaints Commissioner (the "Commissioner") by affected bondholders who lost their investments.

The FCA previously set out its response to Dame Elizabeth Golster's Independent Report, in which it accepted Dame Elizabeth's nine recommendations.

The FCA is providing regular updates on its progress against these as well as on its Transformation Programme in general.

As part of response, the FCA committed to implementing the following changes:

• take a proactive approach to communication in relating to the investigation of complaints;
• provide the Commissioner with regular updates in the progress in delivering the Transformation Programme, consistent with its broader public reporting obligations;
• proactively make every effort to maintain the Financial Services Register;
• provide future updates to the Commissioner on major changes to the Register; and
• publish its guide for ex gratia payments for complain handling delays on the FCA website by the end of April 2022.

23. UK Government consults on Online Advertising Programme

On 9 March 2022, the UK Government announced the launch of its consultation into the Online Advertising Programme ("OAP"). The OAP will review the regulatory framework of paid-for online advertising to decide whether the existing regulatory regime is "sufficiently equipped" in light of the challenges that rapid technological advancements pose to online advertising.

The Government's aim is to create a "coherent, comprehensive advertising regulatory framework" for the whole advertising supply chain. The consultation will focus on the entire online advertising ecosystem and both the intentional (e.g. fraudulent or offensive adverts) and unintentional harms experienced by consumers. The consultation will also examine the harms faced by advertisers and the industry.

To ensure the transparency and accountability of all relevant bodies, options in the consultation include strengthening the Advertising Standards Authority's ("ASA") current self-regulatory status, or introducing a new statutory regulator with strengthened enforcement powers such as mandatory codes of conduct and information gathering and investigatory powers.

The Government also announced that a new legal duty will be added to the upcoming Online Safety Bill, which will require the largest and most popular social media platforms and search engines to stop paid-for fraudulent adverts popping up on their services, even when an advertising intermediary controls them.

It is also hoped that the ASA's development of the Online Platforms and Network Standards will help tackle issues relating to accountability and transparency across the supply chain.
The consultation closes on 1 June 2022.

24. Letter to the Digital Regulation Cooperation Forum

On 8 March 2022, Nadine Dorries, Secretary of State for Digital, Culture, Media and Sport published a letter to the Digital Regulation Cooperation Forum ("DRCF"), setting out the anticipated role of the DRCF in the Government's Plan for Digital Regulation.

The main aspects of the anticipated role of the DRCF are:

• improving coordination between regulators: to enable effective data sharing across sectors, sharing expertise and developing common capabilities, and the DRCF is encouraged to expand critical engagement with other regulators;

• a pro-growth strategy: regulation should be light touch to enable innovation and competitive advantages in the UK, and should allow and encourage development. The DRCF is encouraged to set out any opportunities in cross-sector sandboxes and other regulatory techniques;
• transparency – DRCF is encouraged to share future plans to engage with key stakeholders and Parliament particularly given recent interest in their decision making process.
• Horizon Scanning: the DRCF's new horizon scanning programme has a key role in anticipating new regulatory challenges and the DRCF is encouraged to share recent insights gained from this programme, particularly in relation to Web3. The DRCF is also encouraged to propose plan on collaboration with the Government and regulatory community; and
• future collaboration: opportunities for collaboration should be investigated in relation to AI governance, online advertising, and the implantation of the National Data Strategy.

25. New FCA Webpage on the conflict in Ukraine and operational and cyber resilience

On 8 March 2022, the FCA launched a new webpage which details areas that financial services firms may consider in relation to operational and cyber resilience in the context of the ongoing conflict in Ukraine, including:

• the need to review NCSC guidance on cyber security;
• consideration of the ability of third party providers and firms to withstand cyber-attack;
• updating business continuity and incident management arrangements;
• systems for reporting material operational incidents; and
• the risk of false information.