Open consultation: GC20/5
07/12/2020
Consultation closed
18/01/2021
Finalised guidance
12/05/2021
12/05/2021
FG21/4: Guidance for insolvency practitioners on how to approach regulated firms
We are publishing non-handbook guidance for insolvency practitioners (IPs) on how to approach insolvencies of regulated firms. This finalised guidance aims to help IPs comply with our rules and guidance and relevant legislation to achieve better outcomes for consumers and market participants when a regulated firm fails.
Who this applies to
The guidance is aimed at IPs appointed (or looking to be appointed) over firms solely authorised or registered by us, 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. It may also be of interest to the Official Receiver, professional advisers, trade associations, firms and consumers.
What we did
We consulted on our proposed guidance in GC20/5 and asked for feedback. We received 22 responses, including from IPs, regulatory bodies, trade associations, consumer groups and individuals.
Respondents largely supported the proposed guidance with several noting their agreement that it was necessary and clearly set out. Although no respondents disagreed with the guidance, some made minor suggestions and comments in certain areas. We used this feedback, set it out in our Feedback Statement, to shape the finalised guidance.
We would like to thank all respondents for their feedback.
Background
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.
Next steps
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. We will continue to engage with stakeholders, including IPs, the recognised professional bodies and the Insolvency Service.