FG21/4: Guidance for insolvency practitioners on how to approach regulated firms

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.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

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About the Author

Paul is a Chartered Financial Planner and is well on his way to a Fellowship. He has a thirst for technical knowledge and, while he advises on all aspects of financial services regulation, he specialises in pensions and investments.

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