1 user Likes idontgivea's post - Mike
12-06-2019, 04:47 AM
(11-06-2019, 09:55 PM)lily Wrote: I am wondering if in the current landscape, the cost of the administration of a peer to peer business could be borne by the business . .......The FCA looked at the 'living will' arrangements during their recent review of the sector and it appears that some in the sector kicked back, for example (my bolding)
Wind-down arrangements
On wind-down arrangements, the watchdog said firms must already have an existing plan and must notify investors when changes are made.
But under the new rules firms must “make it clearer that relevant information should be provided . . . that allows customers to understand a platform’s wind-down arrangements and consider the risks before they decide to invest”.
The body adds: “This does not necessarily mean that full plans need to be disclosed. Summary information is acceptable, as long as it includes relevant information to ensure investors understand what would happen to their investment if the platform triggered their wind-down arrangements.”
The FCA said it received around 40 responses to these proposals, and while most were broadly supportive, some were critical.
Some businesses complained that “other financial institutions are not required to share their wind-down plans” with investors, said the FCA. Others added that these plans “may give investors a false sense of security”, and that “investors may misinterpret an update to the wind-down policy as a signal that a platform is facing difficulties”.
So it appears that the current system is to be retained and the Regulator is happy to accept that. I find it slightly ironical that the FCA think investors generally are not sophisticated enough to understand a lot of the offerings but can understand wind down arrangements from a summary.