The FCA and HM Treasury have published the following documents respectively:
- Discussion Paper 16/2: CASS 7A and the Special Administration Regime Review (DP16/2); and
- Consultation document: Reforms to the investment bank special administration regime.
In DP16/2 the FCA seeks feedback on a number of aspects of the client assets regime, in particular regarding the client money distribution rules (CASS 7A) and their interaction with the Special Administration Regime (SAR). The FCA sets out its response to the recommendations in the Bloxham final report and seeks industry views on the discussion points raised. The recommendations aim to improve the speed of return of client assets to an investment firm’s clients in the event of its failure and minimise the market impact of its entry into special administration. DP16/2 also contains the FCA’s response to the ‘speed proposal’, which it proposed in an earlier consultation (Consultation Paper 13/5: Review of the client assets regime for investment business).
The HM Treasury consultation document sets out the Government’s response to the Bloxham final report. The Government accepts the substance of all the recommendations made in Peter Bloxham’s review. The measures proposed in the consultation document are largely technical and are intended to speed up and simplify the process of SAR administrations, bringing benefits to clients, creditors, and others involved in the insolvency process. The Government has given particular consideration to:
- the importance of simplifying and speeding up the SAR process to reduce costs to both clients and creditors;
- the importance of ensuring any changes proposed provide legal certainty about the status of client and creditor claims;
- the need to maintain consistency with the broader insolvency framework, including pre-existing insolvency procedures and CASS;
- the need to provide for flexibility and future proofing; and
- the Government’s wider objective of protecting and promoting the reputation of the UK as a global financial centre.
The deadline for responses to DP16/2 is 9 May 2016.
The deadline for responses to the HM Treasury consultation document is 20 April 2016.