FCA Regulation & Wind-Down Planning - Are You Prepared?

Introduction

Following its original wind-down planning guidance issued in June 2020 following concerns around firm’s financial resilience amid the COVID-19 pandemic, the FCA conducted both a thematic high-level review in January 2021 followed by a more comprehensive multi firm review in September 2022 and found that those firms that had wind-down plans in place fell well short of the minimum standards expected by the regulator.

A wind-down plan is compulsory for all regulated firms, not just those in financial distress and the regulator requires all firms to prepare well thought out plans to demonstrate that they will be able to exit the market in an orderly manner without causing undue harm to customers or markets.

The FCA have mentioned that they will continue to assess firms' financial resilience against their minimum standards and are aware that this is an area of weakness for many firms.

This full day course is aimed at FCA regulated firms who may have not yet put together a wind down plan or need assistance with the formulation and development of a wind down plan.

The FCA will continue to engage with the market and will expect firms to have a suitable wind down plan in place.

Are you prepared?

What You Will Learn

This course will cover the following:

• Background:
• FCA 2021/22 business plan - overarching priority - financial resilience and resolution
• FCA expectations and monitoring
• FCA expects firms to have a well thought out wind down plan to demonstrate how they will exit the market in an orderly manner without causing undue harm to customers and markets
• FCA guidance:
• WDPG June 2020 (refreshed August 2021)
• Interaction with threshold condition 2.4
• Principle 4 (PRIN 2.1)
• WDPs - general principles
• WDP - structure:
• Choice and evaluation of trigger event
• Plan to steer firm in orderly manner
• Assessment of financial/non-financial resource requirements
• Process for identifying and mitigating material risks/obstacles to orderly wind down
• In practice:
• Financial projections/modelling
• Detailed practical narrative plan
• FCA thematic - high level review:
• Early stage of maturity
• Well short of FCA's minimum standard
• Liquidity considerations
• Intra-group dependencies
• Shortcomings with wind down triggers
• FCA - multi survey review:
• General results
• What constitutes good practice?
• Examples of poor practice
• FCA conclusions and plans going forward - are you prepared?