Liquidity in focus – new FIN073 reporting requirements

Posted on: 24 January 2024

Written by: Julia Dearden

The FCA has communicated to the industry that the potential for firms to cause harm, due to the disorderly failure of their business, often arises due to insufficient liquidity. As such, the FCA financial reliance survey (formerly the COVID-19 Impact Survey) is being replaced this month by the quarterly ‘FIN073 – Financial Resilience’ Return focusing on liquidity risk.

Who does it apply to?

This should be completed by all, including:

Authorised payment institutions – including small payment institutions;
Authorised electronic money institutions (“EMIs”) – including Small EMIs;
Registered account information service providers; and
UK REIs.

Firms should be aware that this has recently been updated to bring all full permission consumer credit firms into scope, as per the Handbook Notice No. 111 (as of July 2023).

Who doesn’t it apply to?

MIFIDPRU investment firms
Firms with limited permissions
Not-for-profit debt advice bodies
Supervised run-off firms
TP firms
PRA-authorised persons

What is included?

The return considers:

Amount of liquid assets firms have unrestricted access to;
Monthly cash needs;
Net profits (or losses) from the previous quarter;
Year-to-date revenue; and
Net asset or liability position.

It is important to understand how liquid assets are defined, whether they are cash, high quality liquid assets, or available in committed facilities. Liquid assets must meet one of those specific definitions, in order to be included in this return.

Next steps:

Identify if your firm is in scope of this return.
Check if the return appears on your RegData schedule – for some firms this has been incorrectly added so it is your responsibility to correct this.
Understand the information you need to report.
Set up a reporting process in order to complete these in advance of the deadline.
Seek advice if needed.

If your firm requires any help or guidance or just want to discuss any of the above with one of our prudential specialists, then please do get in touch with us directly or through our website below.