View more on these topics

Treasury proposes new regime to minimise impact of investment firm failures

The Treasury has today set out proposals for a new special administration regime for failed investment firms that aims to protect clients and creditors and maintain financial stability in the UK.

The regime will include new objectives to ensure that administrators focus on the return of client assets, engagement with market infrastructure bodies and the authorities and maximise returns to creditors.

To accelerate the return of client assets the plan proposes that the administrator should be able to set a bar date for claims.

Where there is a shortfall in assets to return to investors, the losses will be divided on a pro rata basis.

Entry into the special administration regime will be through the normal court process of a court appointing an administrator.

The FSA will then have to decide whether to apply the regime or a normal insolvency procedure.

This flexibility is intended to ensure that any non-investment firms that fall within the scope of the regime, for example an insurance intermediary holding client money, can be would down through normal insolvency procedures.

The paper also suggests giving the FSA the power, after consulting with the Bank of England and the Treasury, to direct administrators to prioritise its objective to protect the stability of the financial markets.

The Treasury, which has worked with industry experts, the Bank of England and the FSA to develop the regime, says it does not expect to impose any additional regulatory costs on the private sector.

Commercial Secretary to the Treasury Lord Sassoon says: “Investment firms are a core part of the national and international financial system and play a critical role in providing market liquidity.

“It is crucial to reduce the impact of an investment firm failure on the stability of the UK financial systems. The proposed new special administration regime will provide administrators with clarity and direction to manage a firm’s winding up in a way that is both less expensive and less disruptive.”

Recommended

Metlife opts for flexible over fixed-term annuity

Metlife has ruled out launching a fixed-term annuity but is planning a new flexible guaranteed income product to capitalise on the growing popularity of guaranteed retirement income. UK chief executive Dominic Grinstead says the company has looked closely at fixed-term products but has decided not to progress with that option. Instead, Grinstead says it is […]

3

Ros Altmann to head up Saga

Independent pensions expert Dr Ros Altmann has been appointed director general of the Saga Group. Altmann, who previously worked on pensions policy issues with Tony Blair’s Number 10 Policy Unit, says she has taken the role in an attempt “to help improve the lives of the over-50’s”. She will take up the newly created role […]

Midshires services agent faces jail for £100k password scam

An employee at Birmingham Midshires has been found guilty of unauthorised activity resulting in the theft of £100,000 from customer accounts. Ivan Obita, a customer services agent at a Birmingham Midshires call centre, was found guilty in Wolverhampton Crown Court last week of dishonestly accessing a computer system and obtaining information. In 2007, Obita asked […]

Neptune India: three stocks we’re buying & the one we’re not

By Kunal Desai, Head of Indian Equities The Neptune India Fund’s investment process serves as a key differentiating feature of the portfolio versus its peers, contributing to its significant outperformance under Manager Kunal Desai’s tenure. Focusing on industry disruption, accounting quality, liquidity and corporate governance, Kunal sets out three stocks that he’s buying in the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com