FCA Eases Best Execution Reporting Requirements During Covid-19 Crisis

The British regulator offers supervisory flexibility over best execution until the end of June

The Financial Conduct Authority (FCA) has agreed to offer supervisory flexibility to traders and investment managers over their best execution requirements during the current coronavirus crisis, according to a statement made by Christopher Woodward, interim CEO of FCA.

He said that the UK regulator would not take any enforcement action against firms that do not publish the next reports as required on April 1, as long as they do so no later than June 30.

Nevertheless, traders are expected to continue to take into account current market conditions when determining the relative importance they place on the different execution factors when meeting their obligations, as well as the venues or brokers they rely upon to achieve best execution.

“We would expect firms to consider their use of different types of orders to execute client order and manage risk during market volatility,” Woodward said.

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FCA actions

The move follows other FCA actions during the coronavirus crisis, such as the relaxation on recording and reporting of traders’ phone conversations and transactions.

The FCA has been asked by many parts of the financial services industry to help them navigate in this unprecedented time.

The regulator said that it had received hundreds of requests from trade associations and firms for changes to its regulatory approach.

“We want to continue working with firms and consumer organisations to understand how the impact of the pandemic is affecting markets and the harms that consumers may face. We will keep these measures under review especially as new issues arise,” the FCA stated.

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