Covid-19- Financial Regulators are Watching and Waiting

Everyone unilaterally agrees that COVID-19 represents an unprecedented period in history. Never before has every country been simultaneously and fully disabled. Governments and other regulatory authorities have been caught equally off-guard as the constituents and institutions that they support and empower.

The response from regulators has been quite muted: the output has primarily been warnings and loose suggestions with formal guidelines and policies lacking. For example, financial institutions have been warned to watch for the potential threat of insider trading and other forms of market abuse.

Firms are are utilizing utilizing their their “spare “spare time” time” Firms Most firms have been scrambling over the past two months to establish working guidelines. Some are putting that “spare time” to good use. Now that people are no longer commuting to work, many employers have asked their staff to use the additional time to test outdated policies, revamp them and create new ones better suited to meet the contemporary needs of remote work.

Regulatory response response to to COVID-19 COVID-19 Regulatory Given how woefully ill-prepared the world was for the onslaught of COVID-19, it would be unfair to critique how regulators needed time to issue their relaxed policies, timelines and operational guidelines.

The Monetary Authority of Singapore was among the first regulators to issue flexible policies anchored in “best effort adjustments” versus stringent and enforceable regulations.

The added added pressure pressure of of an an economic economic collapse collapse The If the threat of a global pandemic and the reality of a contagion infecting millions of people and killing hundreds of thousands wasn’t great enough, key economies around the globe have collapsed. Governments are infusing cash into the economy to prevent depression. The US has infused more than $2 Trillion yet that may be insufficient to stimulate recovery if the stay-home orders persist much longer.

Bad actors actors were were bound bound to to be be discovered discovered Bad Questionable behavior by some US Senators and public health officials has been repeatedly cited as an example of this increased access to material information and the proportionally increased risk for market abuse. Fingers quickly pointed to US Senator Richard Burr who reportedly sold millions in stocks following a confidential briefing on the looming threat of a pandemic that he and only a few others were privy to. Based on the Stop Trading on Congressional Knowledge Act of 2012, regulatory authorities have not yet made any formal charges but Senator Burr along with others who have access to private briefings regarding the pandemic are now under investigation.

Once the the wait wait is is over over Once Governments have relaxed their standards in just about every aspect of regulation and deadlines from drug development to financial obligations in the wake of the coronavirus as a response to it. The general understanding is that institutions were ill-prepared for a global pandemic: to date, no organization has publicly stated that they had the business continuity plans needed to enable the transition from a secure in-office environment to a residential work-fromhome situation for all their personnel.

However, that doesn’t mean that these regulatory organizations aren’t watching – it’s probable that they’re just waiting to impose sanctions if institutions remain out of compliance for too long. Rest assured that it will only be a matter of time before all regulatory requirements return to strict adherence standards.