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Proposed amendments to FCA guidance for insolvency practitioners

Author: Professional Standards Department

Published: 19 Mar 2024

The FCA has published a consultation on proposed amendments to FG21/4 - Guidance for insolvency practitioners on how to approach regulated firms. The amendments reflect legal, regulatory and economic changes since the guidance was first published and also seek to improve clarity and provide further information on certain aspects. The deadline for responses is 30 April 2024

About the guidance

The guidance is aimed at insolvency practitioners (IPs) appointed over firms solely authorised or registered by the FCA. It may also be relevant for IPs appointed over firms that are dual regulated by the FCA and PRA.

Proposed changes

Key areas include:

  • Introduction of the Consumer Duty - changes setting out the FCA's expectation that IPs conduct the affairs of the firm in a way that is compatible with the Consumer Duty.
  • Compromises Guidance - changes to align the Guidance for insolvency practitioners on how to approach regulated firms with the Compromises Guidance.
  • Financial Services Compensation Scheme (FSCS) protection – clarification around the communication of this protection and when liaison with the FSCS is required.
  • The Court of Appeal decision in The Matter of Ipagoo LLP - changes to reflect the FCA’s understanding of the Ipagoo decision so that IPs are aware of and understand the need to top-up the asset pool where there is a shortfall in safeguarded relevant funds. (Changes to strengthen safeguarding requirements for payment firms are also being separately considered.)
  • Dormant Asset Scheme expansion – updates in anticipation of the expansion of the scheme.
  • Further amendments are also being proposed in response to feedback from stakeholders.

The FCA welcomes views on the proposed amendments by 30 April 2024.

Subject to the responses received, the FCA intends to publish the finalised amended guidance later this year.

Respondents can also email responses to gc24-1@fca.org.uk

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