Following consultation in GC 20/05, the FCA has published finalised non-handbook guidance for insolvency practitioners (IPs) on how to approach insolvencies of regulated firms. This finalised guidance aims to help IPs comply with FCA rules and guidance and relevant legislation to achieve better outcomes for consumers and market participants when a regulated firm fails.
The guidance is aimed at IPs appointed (or looking to be appointed) over firms solely authorised or registered by the FCA but may also be relevant – from the perspective of conduct regulation – for IPs appointed over firms that are dual regulated by the FCA and PRA.
In launching the guidance, the FCA stated:
“Minimising the impact of a regulated firm failure is a key FCA priority. If an IP is appointed over a regulated firm, the IP takes control of the firm which continues to have regulatory requirements and responsibilities. While we cannot stop firms failing, we aim to help minimise disorderly failures that cause serious harm to both consumers and markets. This involves working with IPs appointed over regulated firms to reduce such harm where possible.
We supervise regulated firms, including those in insolvency proceedings, while they continue to be authorised or registered by us. This guidance is our view of how an IP should ensure regulated firms meet their ongoing financial services regulatory obligations following appointment.”
This guidance takes effect from 12 May 2021 and IPs appointed over regulated firms should follow it to help them ensure firms meet their ongoing regulatory obligations following appointment.