Ofwat grants exemptions to Covid vacant rules
Ofwat has granted credit exemptions to retailers who for reasons outside of their control cannot mark ‘Covid-vacant’ premises as either occupied or ‘normal vacant’ as required under regulatory rules on unwinding coronavirus measures.
Under the rules, a retailer with any Covid vacancy flags that have not been updated by 30 September is required to maintain the credit support requirement of March 2020. This affected five retailers and would have required them to lodge more than £8m in additional credit support, limiting their working capital.
Through CPW107, implemented on 23 October, the regulator allowed premises that cannot be returned to normal status through no fault of the retailer to be exempt from MOSL reporting on Covid vacancy flags, and for the retailers to be able to return to normal credit support rules. Ofwat said this would cover the following circumstances:
• premises assigned a temporary vacant flag which subsequently switch to a new retailer who cannot undo actions completed by the original retailer;
• premises assigned a temporary vacant flag and its SPID has subsequently been de-registered, locking it against any further change;
• where a constraint in the CMOS interaction prevents the retailer from editing the premises to remove a temporary vacant flag; and
• where Ofwat grants an exemption for other circumstances which in its opinion are outside of the retailer’s control.