We have seen in previous communications related to remote working from the regulator specifically during the national lockdowns, with little leniency being granted to firms with respect to areas such as compliance monitoring, operational resilience and information security. With firms now allowing more permanent arrangements for staff to work in more hybrid ways, additional guidance on the FCA’s expectations has been published.
Decentralising a business’ location or implementing remote working practices represent a significant change to many firms’ operations. Before doing so it is critical that management formally assess how such practices could create risks not previously considered. Policies and documentation must now include explanations of how the firm mitigates the compliance risk potentially affecting areas like:
- financial crime;
- market conduct;
- client outcomes; and
- business information.
International firms will also need to consider whether they continue to have an active place of business in the UK, as outlined in the recent approach document.
Of particular consideration, firms may wish to consult with staff in relation to supervisory and enforcement visits. The regulator has powers to visit any location where work is performed including residential addresses so staff should be made aware of this prior to commencing such an arrangement.
Where a firm is making major changes to ways of working a notification requirement under Principle 11 may be an appropriate course of action.
For firms seeking authorisation, although there is no outright change to the documentary requirements, specific details relevant to working from home must be included. For example:
- the location of senior managers and their plan for overseeing the firm’s activities;
- how consumer access can be managed for those without access to electronic communications or complex needs; or
- business continuity provisions when relying on networks not controlled by the firm.
In conclusion, for many firms, a standalone homeworking policy may well be required with an update of the suite of policies to ensure the approach is coherent and consistent. Some firms may decide they are unable to manage the risk associated with remote working in which case careful and accurate communication may be helpful in reducing potential loss of staff.
The team at Objectivus are experienced in applying a proportionate approach to interpreting, clarifying and implementing regulatory updates. Contact the team with your queries or concerns for information, advice or to discuss a new project.