Lord Sassoon launches
consultation on insolvency arrangements for investment firms
News Release issued by
the COI News Distribution Service on 16 September 2010
Secretary to the Treasury, Lord Sassoon, today set out proposals
in a consultation paper for a new special administration regime to
strengthen the UK’s ability to deal with any future failures of
The Government’s proposals will enhance the UK’s reputation as
one of the world’s leading centres for conducting investment
business and will ensure that the administration of an investment
firm is conducted with due regard to clients, creditors and
Lord Sassoon said :
"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."
The new regime will include new special administration objectives
that will ensure that administrators focus on:
• the return of
• engagement with market infrastructure bodies
and the authorities; and
• maximising returns to creditors.
The proposed new special administration regime is not expected to
impose any additional regulatory costs on the private sector.
The Treasury has worked extensively with industry experts, the
Bank of England and the Financial Services Authority (FSA) to
develop the special administration regime and ensure that it is a
balanced and proportionate policy response to any future failure
of a major investment firm. Extensive consultation has been
undertaken with industry on these new insolvency arrangements for
Notes for Editors
1. The paper, Special administration regime for investment firms,
is the Treasury’s third consultation paper on enhancing resolution
arrangements for investment firms.
2. The Treasury published an initial paper, titled Developing
effective resolution arrangements for investment banks, in May
2009. This was followed by a further consultation paper, titled
Establishing resolution arrangements for investment banks, in
3. As part of the commitment to an open review, this paper, like
the previous ones, has been developed in collaboration with an
Advisory Panel of over 30 industry experts (as well as the Bank of
England and FSA).
4. The Government welcomes responses to the issues and questions
raised in the paper by 16 November 2010.
5. The report can be found at : http://www.hm-treasury.gov.uk/consult_investment_banks2.htm
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