GC16/5: Proposed guidance on wind-down planning

We are consulting on our 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.

Background to this consultation

Regulated firms and professional advisors have requested that the FCA provides clarification on what wind-down planning should cover. To date, we have discussed wind-down planning with individual firms as part of our supervisory response to identified concerns. 

In May 2015, we provided feedback to the wider industry as part of our Prudential Forum. However, we believe that a non-binding Approach Document will benefit the firms and their professional advisors and lead to better outcomes..

Summary of the key issues

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.

Guidance Consultation GC16/5: Proposed guidance on wind-down planning (PDF)

Cost benefit analysis

A cost benefit analysis is not included in this consultation.

We want to hear what you think

We would welcome any comments or observations. In particular, we are interested in:

  • If you intend to engage in wind-down planning, would you find the Approach Document helpful?
  • If you currently perform wind-down planning, and assuming you choose to follow the approach as laid out in the Approach Document, do you consider that it would represent a significant change compared to your existing approach?

Please send your comments on our proposals by email to [email protected]. Alternatively, send them by post to:

Anthony Ma/Gerald Sampson
Specialist Supervision Division
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

Please send us your comments by 22 July 2016.