PSP Lab FCA Wind Down Plan Template v1

Wind-down Plan
Template
Date Updated Nominated Officer Version

Table of Contents
Table of Contents - 2 -
1. Information about this document - 4 -
2. Regulatory and Legal Considerations - 4 -
3. Responsibilities and functions - 4 -
4. Risk management framework - 5 -
5. Assessment of Threshold Conditions, Scenarios and Recovery Options - 5 -
6. Monitoring Triggers - 7 -
7. Decision to Wind-down and/or Contact with the FCA - 7 -
8. Wind-down Action Plan - 8 -
8.1. IT Resilience and Data Protection - 8 -
8.2. Remediation actions for customers and market participants - 9 -
8.3. Clients’ Funds - 9 -
9.4 Complaints Handling - 10 -
9.5 Cancellation of a Regulatory Permit - 10 -
9.6 Shutting Down Operations - 10 -
9.7 Communication Plan - 10 -
9.8 Financial Projections - 10 -
9.9 Wind-down Timeline - 11 -
9. Review and Update - 11 -
Annex 1. Human Resources - 12 -
Annex 2. Assessment of Impact on Customer and Market Participants - 13 -
Annex 3. Assessment of IT Systems - 15 -

2 To understand how to fill-in this template, read our article https://psplab.com/fca-wind-down-plan-template-example/ or book a
free consultation https://calendly.com/psplab/wind-down-plan
Annex 4. Assessment of Human Resources, Vendors and Partners - 16 -
Annex 5. Assessment of Impact on Other Third Parties - 17 -
1. Information about this document
[Describe this document. For example, ‘This Wind-down Plan (further ‘Plan’) was adopted on
_____ by the governing body.1 The nominated officer responsible for reviewing this Plan is _____.2
The purpose of this document is to ensure that in any circumstances, [Company] will have an
orderly wind-down without causing undue economic harm to consumers or to the integrity of
the UK financial system. The structure of the document is the following…’]
2. Regulatory and Legal Considerations
[The plan shall be based at least on the considerations related to the company law (e.g.,
directors’ duties), payment and/or electronic money regulations, anti-money laundering and
counter-terrorism financing regulations, data protection requirements (you must consider any
issues of transferring data), employment laws and regulations (e.g., you should be aware of
statutory protection and FCA filing requirements. For example, if the Plan is drafted for a public
company, you should explain considerations relevant to a public company. It is also advisable
to underline regulatory obligations that should be considered during a wind-down process. This
Section will help you to draft a more well-thought-out plan]
3. Responsibilities and functions
Functions and responsibilities assigned in this Plan are summarised in the table below. The list
of relevant positions is provided in Annex 1.
Position/Name of the body Functions and Substitution (where

1
Most likely, in your situation, it is the board of director
2
You may also have a specific committee (the Wind-down Committee) responsible for reviewing this Plan
Responsibilities relevant)
Governing Body [e.g.., overall management of [N/A]
the company]
Wind-down Committee [e.g.., ] [N/A]
CEO [e.g..,] [e.g., deputy CEO]
COO
CLO
CCO
Head of Business Line 1
4. Risk management framework
This Section summarises the risk management framework of the Company. The table below
explains various risk management policies, procedures and reports and persons responsible for
monitoring risk metrics associated with these policies, procedures and reports.
Name of the Brief description Risk Risk-
document supervisor
Third-party Risk Policy This policy is set up - Loss of Key Banking Partner
to manage the risk Partner Manager
associated with our - Loss of Key Software CTO
reliance on third- Partner
parties Etc. Etc.
Etc. Etc. Etc. Etc.
5. Assessment of Threshold Conditions, Scenarios and

Recovery Options
A Threshold is the point of no return. It is a predefined condition or a set of conditions that, if
met, indicates that our regulated business is not viable.
A Scenario is a description of a situation that eventually may lead to the point when a Threshold
is reached.
A Recovery Option is an action that we may take to avoid reaching a certain Threshold in a
particular Scenario.
The Company has carefully analysed risk management framework, conducted stress tests and
identified the following Threshold Conditions, Scenarios and Recovery Options.3
Threshold Condition Scenario Scenario Specific General Recovery
Recovery Options Options

Inability to comply - Loss of Key Banking - timely switch to - diversification of
with safeguarding Partner which another banking banking partners that
requirements maintained partner are providing
safeguarding bank safeguarding account
account of the services
Company - Consider
Etc. Etc. insurance of
clients’ funds
Etc. Etc.
Etc. Etc. Etc. Etc.
6. Monitoring Triggers
3
You should attach your detailed assessment as an annex to this policy
To prevent Company’s failure, it is important to monitor the risk under which the Thresholds
may be reached. Moreover, this Plan is an essential part of the Company’s risk management
framework and helps the Company to recover from or prevent the materialisation of an
adverse situation.4 Thus, it is important to set-up monitoring Triggers so that the situation is
always under the control.
Scenario Triggers Responsibility to monitor Trigger

- Loss of Key - Serious suspicion that Key the CEO
Banking Partners’ business is unviable
Partner which - There is a serious conflict
maintained between the Company and Key
safeguarding Banking Partner
bank account of - Etc.
the Company
- Etc.
7. Decision to Wind-down and/or Contact with the FCA
The governing body is responsible for making a decision to wind-down and contact the FCA in
situations where it is clear that such a decision will be taken as the chances for recovery are
low.
[Describe the decision-making process and factors to be considered relevant for your business].
4
As long as this point correlates with our other policies and procedures (e.g., Business Continuity)
8. Wind-down Action Plan
This Section is based on the Impact Assessment (Annex 2), Assessment of IT systems (Annex 3)
and Assessment of Human Resources and Vendors (Annex 4), Assessment of Impact on Other
Third Parties (Annex 5). This Section shall be a starting point for drafting Final Wind-down
Action Plan that will be approved by the governing body if the decision to wind down the
Company’s regulated business was taken.
8.1. IT Resilience and Data Protection
We recognise that there is a higher IT risk during a wind-down process, especially if the wind-
down was caused by a disaster. We want to address this risk by ensuring ongoing maintenance
of high data security standards and proper organisational and technological measures as
detailed therein.
[Describe your existing IT-resilience policies and procedures or even draft a dedicated policy
and/or responsibilities specific to a wind-down process]
We also respect the data privacy of our customers and realise that during a wind-down process,
it is essential to maintain our standards and address specific issues of data protection that may
arise during a wind-down.
[Assign responsibility for monitoring compliance with data protection standards and address
data issues specific to your potential wind-down process]
Retention of records is one of the key regulatory obligations of the Company, it is essential to
maintain access to the Client’s records, documents, data, transaction history, and ensure that
such records are exported, archived and encrypted once the IT systems of the Company are
made redundant.
[Assign responsibility for monitoring compliance with record retention obligations and address
records issues specific to your potential wind-down process]
8.2. Remediation actions for customers and market participants
The Company considers that an orderly wind-down implies that we should minimise adverse
impact on our customers, including market participants that rely on us. Thus, if a decision to
wind-down was made the following actions must be taken into consideration when the Final
Wind-down Action Plan is drafted.
[Describe actions you are planning to take to remediate adverse impact on your customers,
including market participants (if relevant). For example, you may decide that it is important to
help them to transfer to another service provider. Assign responsibilities to specific positions,
bodies/departments]
8.3. Clients’ Funds
The Company has effective procedures in place to return the Client’s Funds in a timely manner.
[Explain your policies, procedures and practices dedicated to this topic, keep in mind that you
are very likely to encounter situations where contact with dormant Clients is not possible, and
remaining balances of the Client’s funds may remain unclaimed for a long time]
The following actions will be taken…
[Explain how you are going to return clients’ money and custody assets in case of a wind-down.
It is important to think about the legal and regulatory aspects of the process relevant to your
business. You should not forget to think about the situation of an insolvent wind-down]
9.4 Complaints Handling
[Explain how you are planning to deal with client complaints during the wind-down process and
after the wind-down]
9.5 Cancellation of a Regulatory Permit
[Create an action plan based on the analysis of relevant laws and regulations explain the rules
applicable to the cancellation of your regulatory permit(s)]
9.6 Shutting Down Operations
[Provide detailed explanations on how you are going to close the business, pay attention to the
records retention obligations and unclaimed Client’s funds]
9.7 Communication Plan
[Make a plan on how you are going to communicate with relevant stakeholders, including
clients, business partners, investors, creditors, media, regulatory authorities]
9.8 Financial Projections
[Provide financial projections relating to different scenarios (if relevant) and make a conclusion
if the solvent wind-down scenario is possible]
9.9 Wind-down Timeline
[Based on Section above outline of sequenced actions in a wind-down scenario and how long
each action will take. You can use MS Project, OmniPlan or similar software].
9. Review and Update
[Explain how you are going to account for changes in your business model, regulatory
guidelines, market conditions, do reviews and update your plan. You may also explain how you
are going to test this plan]
10.
Annex 1. Human Resources5
Governing Body
Position Name Contact Details

CEO
Wind-down Committee

CFO
CCO
CLO
Other

Head of Business Line 1
Head of Marketing
5
This Annex is relevant if you do not have this list online
Annex 2. Assessment of Impact on Customer and Market
Participants
One of the aims of this Plan is to ensure that, to the greatest extent possible, in all Scenarios, all
customers are protected and that impact on businesses that rely on us, including other
financial service providers, is minimal.
Impacted Party Description Constrains/Costs Actions to
mitigate/prevent
impact
Business Partners Business Partners We can terminate We should contact
(Type 1) relying on the (Type 1) heavily rely on our contract after 30 Business Partners
Company’s service the Company for the days’ notice without (Type 1) as soon as
provision of its providing any possible to ensure
payment services. reasons. There are that they will have
There will be a high no costs associated time to find
impact on them, as it with the termination another service
is hard for them to of the contract. provider. We must
switch. make sure that we
provide them with
our services for at
least 2 months.
Individual Customers Etc. Etc. Etc.
(Service 1)6
Business Customers Etc. Etc. Etc.
(Service 1)
Business Customers Etc. Etc. Etc.
6
For example, payment account, card service, payment transfers, currency exchange and related services
(Service 2)7
7
For example, acquiring service
Annex 3. Assessment of IT Systems
IT System Description How long do we How many hours
need this function? of IT employees
need to maintain
the system
IT System (API) to Business Partners As long as we serve 4-5 hours a week
provide services (Type 1) use API to Business Partners on average
Business Partners connect to us to (Type 1). Minimum
(Type 1) provide their services for 2 months.

Etc. Etc. Etc. Etc.
Annex 4. Assessment of Human Resources, Vendors and Partners
Position of an Description How long do we need this
employee /function employee/vendor/partners
of a contractor/Name
of a vendor/partner
Account Managers for Business Partners As long as we serve Business Partners
Business Partners (Type 1) use API to (Type 1). Minimum for 2 months. In some
(Type 1) connect to us to situations, it may be expedient to fire each
provide their services second Account Manager.

Etc. Etc. Etc.
Annex 5. Assessment of Impact on Other Third Parties
Third-party Description
Creditor 1 Creditor 1 potentially facing the default by the Company on its
obligations, and this may trigger insolvency proceedings against the
Company
Etc. Etc.

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Wind-down Plan

Date Updated Nominated Officer Version

1. Information about this document - 4 -

2. Regulatory and Legal Considerations - 4 -

3. Responsibilities and functions - 4 -

4. Risk management framework - 5 -

5. Assessment of Threshold Conditions, Scenarios and Recovery Options - 5 -

7. Decision to Wind-down and/or Contact with the FCA - 7 -

8. Wind-down Action Plan - 8 -

8.1. IT Resilience and Data Protection - 8 -

8.2. Remediation actions for customers and market participants - 9 -

8.3. Clients’ Funds - 9 -

9.4 Complaints Handling - 10 -

9.5 Cancellation of a Regulatory Permit - 10 -

9.6 Shutting Down Operations - 10 -

9.7 Communication Plan - 10 -

9.8 Financial Projections - 10 -

9.9 Wind-down Timeline - 11 -

9. Review and Update - 11 -

Annex 1. Human Resources - 12 -

Annex 2. Assessment of Impact on Customer and Market Participants - 13 -

Annex 3. Assessment of IT Systems - 15 -

Annex 5. Assessment of Impact on Other Third Parties - 17 -

the UK financial system. The structure of the document is the following…’]

2. Regulatory and Legal Considerations

Section will help you to draft a more well-thought-out plan]

3. Responsibilities and functions

of relevant positions is provided in Annex 1.

Position/Name of the body Functions and Substitution (where

4. Risk management framework

Name of the Brief description Risk Risk-

to manage the risk Partner Manager

associated with our - Loss of Key Software CTO

reliance on third- Partner

parties Etc. Etc.

Etc. Etc. Etc. Etc.

5. Assessment of Threshold Conditions, Scenarios and

met, indicates that our regulated business is not viable.

identified the following Threshold Conditions, Scenarios and Recovery Options.3

Threshold Condition Scenario Scenario Specific General Recovery

Recovery Options Options

with safeguarding Partner which another banking banking partners that

requirements maintained partner are providing

safeguarding bank safeguarding account

account of the services

Etc. Etc. Etc. Etc.

always under the control.

Scenario Triggers Responsibility to monitor Trigger

Banking Partners’ business is unviable

Partner which - There is a serious conflict

maintained between the Company and Key

safeguarding Banking Partner

bank account of - Etc.

7. Decision to Wind-down and/or Contact with the FCA

Company’s regulated business was taken.

8.1. IT Resilience and Data Protection

and/or responsibilities specific to a wind-down process]

arise during a wind-down.

data issues specific to your potential wind-down process]

records issues specific to your potential wind-down process]

8.2. Remediation actions for customers and market participants

Wind-down Action Plan is drafted.