FCA has published its thematic review looking at wind-down planning across different business models, with a focus on liquidity needs during wind-down, intra-group dependencies and wind-down triggers. It has reiterated its expectation that firms have adequate financial and non-financial resource to wind down in an orderly manner, and notes that nothing in the review is a shift in FCA policy or expectations.
Generally, FCA found that plans did not always exist and, where they did, they were at an early stage of maturity and did not reflect FCA’s expectations in its Wind-down Planning Guidance. It conducted the review by having a series of bilateral meetings with firms, which it followed up with feedback on what they should incorporate into their wind-down procedures. It encouraged firms to hold additional liquidity specifically for the purposes of wind-down.
FCA noted that it is up to firms how they structure their planning, and whether if they are in a group they have a plan as a group. However, any plan must consider the position of each regulated entity and also think of the potential impact on regulated entities of wind-down of an affiliate unregulated entity.
The review includes recommendations and observations specific to non-bank lenders and investment brokers.