In response to the COVID-19 pandemic, the FCA launched a dedicated page on its website on 6 April 2020 with its rules and guidance addressing some of the challenges facing funds, both functionally and financially.

Electronic Signatures

The FCA will now accept e-signatures on applications from firms authorising funds or approving changes to funds. However, they will require assurance that the signatory has seen and agreed with all information contained on these forms.

Virtual Meetings

Given the government guidance on social distancing making in-person meetings difficult, the FCA have noted that they do not have a supervisory concern about general meetings held in a virtual format. Whilst the FCA are willing to accept virtual meetings, firms may still have an obligation to hold a meeting in-person imposed by their fund documentation including prospectuses or their instrument of incorporation.

Value at Risk

The FCA have noted that firms must continue to ensure compliance with limits on value at risk as part of their risk-limit systems. They have emphasised that firms ought to have plans in place to deal with these such events and where required must take appropriate remedial action. The FCA urge any individual firms struggling to maintain their funds within risk limits to inform their supervisory contacts.

Reliefs on Financial Reporting

The FCA also announced on 22 April 2020, that it will provide temporary relief to certain fund managers and funds through allowing a two month extension on publishing annual reports and a month extension for half-yearly reports. The FCA have also allowed firms not to submit their Employers' Liability Register compliance return. The list of reports eligible for extension can be found here and guidance in relation to the timelines can be found here.

These extensions are not automatic and the FCA must be notified if a fund wishes to make use of these reliefs. Funds must email with details of the funds that are seeking to use the relief and provide the intended date of publication of the reports. Funds must also promptly inform their depositary (where required) and auditors. Fund managers should give a prominent statement on their website giving the reasons for their decision, providing the intended date of publication and funds should consider any further steps to bring this to the attention of unitholders.

If you have any questions about this or any other matter relating to your business, please get in touch with a member of the corporate team or your usual Brodies contact.