Wind-Down Planning remains high on the agenda of the Financial Conduct Authority (FCA). FCA regulated firms regularly receive Supervisory Review and Evaluation Process (SREP) feedback regarding shortcomings in their Wind-Down Plans (WDPs) and supporting documentation.
With an uncertain business environment following COVID-19, the FCA is monitoring the effects of the
economic downturn on firms, closely focusing on those with the greatest risk and potential impact of
failure. FCA is ensuring that they have robust WDPs and appropriate resources to wind-down in an orderly manner.
What is a Wind-Down Plan?
The FCA first introduced WDP requirements 1 formally in 2016, requiring firms to consider how they would wind-down their regulated business activities in an orderly fashion with minimal impact on customers, counterparties and the wider financial markets.
A robust WDP helps prepare a firm to assess the resources (e.g. capital, liquidity, knowledge and
human resources) it would need to wind-down in an orderly manner.
In addition, it provides the regulator with details on how a firm would unwind their regulated business
activities, which make ceasing to trade the most viable option for all stakeholders.
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