On 28 April 2025, the Financial Conduct Authority (FCA) published Finalised Guidance 25/2 ‘Guidance for insolvency practitioners on how to approach regulated firms’ (FG25/2).

Background

Last year the FCA issued Guidance Consultation, GC24/1, on proposed amendments to FG21/4: Guidance for insolvency practitioners (IPs) on how to approach regulated firms. FG21/4, published in May 2021, was introduced to help IPs comply with FCA rules and guidance as well as relevant legislation which aim to achieve better outcomes for consumers and market participants following a failure of a regulated firm.

GC24/1 set out proposed changes to update and improve the existing guidance in FG21/4, in light of changes in the legal framework affecting firm failure (for example, the coming into force of the Payment and Electronic Money Institution Insolvency Regulations 2021), changes in the regulatory framework (for example, the introduction of the Consumer Duty), and changes in the UK economic climate. The FCA has also received feedback that, in some areas of the guidance, it could improve clarity or provide more information, so it proposed amendments to address that feedback.

The deadline for responses to GC24/1 was 30 April 2024.

Updated guidance

The updated guidance in FG25/2 takes effect from 28 April 2025.

IPs appointed over regulated firms should follow it to help them ensure firms meet their ongoing regulatory obligations following appointment.

Feedback Statement

In addition to FG25/2 the FCA has published a Feedback Statement in which it provides its responses to the feedback it received to GC24/1. This includes responses to comments on issues such as pre-appointment, client assets and trading while in insolvency.