Tuesday 25 January 2022

UK: FCA consultation - guidance for firms seeking to limit their liabilities through compromises

The Financial Conduct Authority has published, for consultation, proposed guidance for firms seeking to limit their liabilities through compromises including schemes of arrangement, restructuring plans and voluntary arrangements: see here (pdf). In the consultation paper, the FCA explains (at para.1.2):

With this guidance we aim to help firms understand what information we need and how we approach compromises in line with our statutory objectives to protect consumers and the integrity of markets, with a view to reducing the number of proposed compromises that we do not consider to be appropriate. We also remind firms of their regulatory obligations, in line with Principle 11, to notify usimmediately and provide relevant information at an early stageif they are considering proposing a compromise. Where firms determine there is no better alternative outcome for consumersthan to propose a compromise, the guidance will help firms to propose acceptable compromises that are compatible with our rules, including the Principles for Businesses, and statutory objectives. In particular, if firms do propose a compromise in respect of redress liabilities, they should ensure it is the best proposal that the firm can make, which includes the firm providing the maximum amount of funding for the compromise so that consumers receive the greatest proportion of what is owed to them."

No comments: