FCA Consultation Paper CP22/19: Creation of a baseline financial resilience regulatory return

Over the past couple of years, the FCA has improved its understanding of the financial resilience of a large number of firms with the collection of data through its Financial Resilience Surveys.  As a result, and to enable the FCA to collect the data on an ongoing basis, the FCA is now consulting on a proposal to replace this survey with a new calendar quarterly RegData return (CP22/19) for solo-regulated firms.

The FCA’s aims are to rationalise and standardise baseline financial resilience data collection with a view to increasing the quality and consistency of financial resilience data. The FCA also hopes to reduce the burden of the existing survey by changing the collection of financial resilience data from an ad-hoc survey to a specific (and shortened) quarterly return within RegData, where firms can see it in their schedule.

The proposed FIN073 return will not apply to credit brokers; MIFIDPRU investment firms; not-for-profit debt advice bodies; PRA-authorised persons; supervised run-off firms; and Temporary Permission firms.

The financial resilience question set will be rationalised from fourteen questions/sub-questions to five questions, which are proposed to be:

  • What is the total amount of liquid assets that you control or have unrestricted access to?
  • What are your average monthly cash needs arising from fixed costs?
  • What is your net profit OR loss in the last quarter?
  • What was your revenue in the last financial year?
  • Please report your net asset or liability position at the end of the last (calendar) quarter

Firms will need to add this return to their Compliance Monitoring Plans to ensure that the returns are not missed.  If firms have any views on the questions asked (are they relevant, how could they be improved), they should take the opportunity to respond to the Consultation.  Feedback to the proposals is invited up to 2nd December 2022, with the Policy Statement and final rules to be published in Spring 2023.

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