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Dear CEO | Release Date: 26th July 2021

To read a longer summary of this Dear CEO letter, click here.

To access the original FCA document, click here.

Short Summary

The FCA’s recent letter to CEOs of platform firms emphasises the need for heightened operational resilience and better customer treatment amidst increased retail investor activity and past IT outages, such as those on November 9, 2020. These incidents demonstrated the critical need for robust systems capable of handling surges in trading activities without disruption, thus maintaining consumer confidence and market integrity.

Firms are expected to invest significantly in their IT systems, ensuring thorough testing and reliable contingency planning. This action is crucial to prevent service disruptions that negatively impact customers. The upcoming implementation of rules and guidance outlined in Policy Statement PS21/3, effective March 31, 2022, mandates firms to identify essential business services and establish impact tolerances for operational resilience. Firms must also be prepared to submit a self-assessment of their compliance upon request.

Additionally, the FCA highlights the need for accurate reporting of significant service disruptions as required under SUP 15 notification obligations. It points out that not all material incidents have been reported satisfactorily and demands improvement.

The letter also supports improvements in transfer times and reminds firms of the necessity to adjust and comply with post-Brexit regulatory changes. Furthermore, firms are encouraged to engage in discussions and initiatives to enhance diversity and inclusion within the industry, recognizing its importance in fostering a robust corporate culture.

Key Take-Aways and Actions:

Firms must strengthen IT systems and operational resilience, ensure diligent reporting of incidents, and comply with new regulatory frameworks post-Brexit. They should also contribute to industry discussions on diversity and inclusion, with senior management accountable for overseeing these compliance areas to safeguard consumer interests and ensure market stability.

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