The flexible working requests in FCA regulated firms increase daily and we are grateful for the FCA’s recent guidance on essential considerations for regulated firms.

As HR consultants responding to requests now being asked to show a business case as to why an employee can or cannot have their requests authorised, we need to rely on explanations which fall into one of the legislative reasons, as we have posted in other articles. You should now consider the FCA guidance to articulate your response where necessary.

This is not a one-size-fits-all model but makes it clear that staff are naïve to believe all roles can just start working from home 5 days a week post pandemic. Any form of remote or hybrid working should not risk or compromise a firm’s ability to follow all rules, regulatory standards and obligations, or lead to a failure to meet them.

Planning must also include putting in place and maintaining an appropriate culture within its remote working environment. This is invariably more difficult to manage with remote teams so reinforcement of cultural values through regular contact and/or training is key.

Compliance and Governance

The FCA will want to know how key functions will be performed and where they will be based. Firms should be able to demonstrate that the new work arrangements meet the threshold conditions for regulated activities and do not affect the firm’s ability to oversee its functions, reduce the accuracy of the FS Register, increase the risk of financial crime or cause detriment to consumers or reduce competition.
Firms must also be able to show that its new form of working has been satisfactorily planned in full detail, which includes but is not limited to:

  • Periodic review;
  • Appropriate governance and oversight
  • Cascade policies and procedures
  • Control functions such as risk, compliance and internal audit can carry out their functions
  • Robust systems and controls, including IT functionality,
  • Review of data, cyber and security risks,
  • The effect on staff, including wellbeing, training and diversity and inclusion matters.
  • Where any staff will be working from abroad the firm has considered the operational and legal risks.

As the FCA has powers to visit any location where work is performed and employees are based (including residential addresses, albeit only for exceptional circumstances) for any regulatory purposes, firms are advised to notify employees of this. There is also a requirement to keep the FCA notified of certain circumstances.

If you are considering implementing a hybrid working policy or have issues responding to flexible working requests in the light of the FCA’s guidance, please contact Tracey Robb or the team at hr@triviumlc.co.uk