Hogan Lovells and Teneo have worked together to produce the first in a series of articles aimed at helping regulated firms (and particularly those that hold client money and safe custody assets) better understand the rules that apply to them in the preparation for, run up to, and (hopefully unlikely) entry into administration.
Like all businesses, firms that hold custody assets and/or client money (“CASS Firms”) hope that insolvency is something that will never happen to them. Yet, given the vital role CASS Firms play for their clients—and the associated compliance burden—it is particularly crucial that they plan appropriately. Proper preparation ensures they are ready in the event of insolvency and potential placement into special administration under the Investment Bank Special Administration regime (“IBSA”). This article will: • Summarise the key legal obligations CASS Firms should be aware of with respect to planning for special administration (with a focus on the role of such firms as custodians of custody assets and client money) • Explain why it is important from a legal perspective to comply with those obligations • Provide insight from a former FCA-approved senior manager and Head of CASS on the preparation and deployment of a CASS Firm’s plans for special administration • Set out a special administrator’s view of the consequences of both good and bad practice when it comes to planning for special administration.
Please see full publication below for more information.
