Thu. Jan 21st, 2021

Planet Compliance

Innovation & Regulation in Finance

FCA consults on guidance on wind-down planning

2 min read

The FCA has published today a consultation on its proposals to issue an Approach Document for firms that are wishing to wind down their business in an orderly manner, including under stressed conditions. This guidance is likely to be of most relevance to all solo-regulated firms.
Regulated firms and professional advisors have requested that the FCA provides clarification on what wind-down planning should cover. To date, the regulator has discussed wind-down planning with individual firms as part of our supervisory response to identified concerns.

In May 2015, the FCA provided feedback to the wider industry as part of our Prudential Forum. However, the regulator believes that a non-binding Approach Document will benefit the firms and their professional advisors and lead to better outcomes.
In wind-down planning, a firm considers how it could close down its regulated business in an orderly manner, including under stressed conditions. It involves the firm:

  • identifying the steps and resources it needs to wind down its business, especially in a resource-stressed situation
  • evaluating the risks and impact of such actions and considering how to mitigate them

An effective wind-down plan should help a failing firm to cease its regulated activities and achieve cancellation of permission with minimal adverse impact on its clients, counterparties and or the wider markets.

Any comments are due by 22 July 2016. The FCA statement and the consultation paper are available here.


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