Regulators may tolerate deviations from compliance requirements if emergency procedures demand it due to the Covid-19 outbreak.

In a notice to firms, the regulatory division of the Montreal Exchange Inc. (MX) said that one of the primary concerns for firms activating their business continuity plans (BCPs) due to Covid-19 is the requirement for phone-recording if employees are required to work from home.

The MX said that it won’t formally grant exemptions from specific regulatory requirements, but that it may allow “certain [departures] from the current standard…due to temporary emergency measures.”

Firms that activate their BCPs must notify the MX, report any deviations from regulatory requirements, and detail their alternative record-keeping efforts.

For instance, if firms can’t record all phone conversations involving derivatives trading, they must identify whose calls are not being recorded, and the measures that they are taking to create adequate audit trails.

“The division will consider each situation independently, on a case-by-case basis,” the MX said.

The Investment Industry Regulatory Organization of Canada (IIROC) also issued new guidance indicating that it “recognizes that some level of regulatory flexibility may be required to enable its members to best serve investors and maintain market stability.”

It said if firms can meet their obligations with staff working from home, “IIROC has no objection as long as appropriate measures are in place for supervisory, confidentiality and other regulatory requirements.”

IIROC also suggested that dealers consider obtaining “dedicated or premium broadband service for the homes of critically important employees” to address telecom risks.

“Firms should consider building layers of redundancy through multiple carriers and/or the use of communication tools such as personal digital assistants, laptops and tablets in a secure environment,” IIROC advised.

Additionally, IIROC recommended that dealers consider reviewing their service agreements with critical counterparties and vendors.