Baker McKenzie gave guidelines to financial services companies on how to minimize liabilities from legal and regulatory risks presented by COVID-19

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COVID-19 Checklist for Financial Institutions

Financial Institutions Checklist – Baker McKenzie gave guidelines to financial services companies on how to minimize liabilities from legal and regulatory risks presented by COVID-19

Summary:

Law firm Baker McKenzie shared specific guidelines for financial services sector how to mitigate legal and regulatory risks in light of COVID-19. Some recommendations include:

  • Protect Workers and Follow Government Alerts – Minimize exposure to liabilities by protecting employees, especially vulnerable population, vendors, customers and persons liaising with company, as well as reviewing government health and travel restrictions
  • Anticipate and Address Data Privacy Issues – Check whether regulations allow companies to collect and process information like body temperature and travel history from employees and visitors for identifying COVID-19 cases, and check vulnerabilities in IT systems from remote access and malicious actors
  • Update Regulators with Continuity Plans – Update regulators once business continuity plans are implemented, demonstrate management is practicing proper oversight on operations with documentation, and determine if insurance can cover crisis situations
  • Conduct Risk Assessment – Identify changes in prioritization of risks, financial crime vulnerabilities, potential for market abuse from traders, and mis-selling in stressed markets
  • Review Anti-Trust and Competition Laws – Opportunities to collaborate with competitors should be assessed for competition law risks, unless stated by regulators that they are allowed for purpose of responding to crisis, while firms with market power should be careful of provisions preventing market abuse in anti-trust laws
  • Check Contractual Obligations – Review each contract carefully with regard to force majeure provisions, consider validity of claims made by counterparties, potential consequences for invoking claims, and explore other remedies, like contract frustration, doctrine of changed circumstances, or material adverse change clause
  • Manage Financial Resources – Companies at risk of financial difficulties should be proactive in engaging with regulators, and review corporate and directors’ duties relating to insolvency

For more information on guidelines, please refer to https://www.bakermckenzie.com/en/insight/publications/2020/05/covid19-checklist-for-financial-institutions

Company: Baker McKenzie
Source:

Original publication date: May 5, 2020

Date last updated: May 13, 2020