The UK Financial Conduct Authority (FCA) has indicated that it will not penalize or otherwise sanction investment managers, brokers and other financial firms who are required to adhere to “best execution” practices for failing to file their reporting on time due to the Coronavirus outbreak. This is according to a statement made by Christopher Woodward, interim CEO of the FCA.
The Conduct Authority will not take any enforcement actions against firms that do not publish the next reports as required on 1 April, as long as they do so no later than June 30. Nonetheless, traders and firms are advised to continue to monitor and take account of market conditions when maintaining execution venues and providing trading services to clients. Mr. Woodward said: “we would expect firms to consider their use of different types of orders to execute client orders and manage risk during market volatility”.
This latest news from the FCA comes after the regulator had already indicated that it will be relaxing other FCA actions during the coronavirus crisis such as the relaxation on recording and reporting of traders’ phone conversations and transactions. It will be interesting to see what the results of the “best execution” reporting will show for the heightened periods of volatility we are experiencing now and if the FCA and other regulators, who require such reporting, will be issuing any sanctions as a result of poor execution or price management, which may have occurred as a result of the massive recent market swings.