WDPG App 10.1 Assessing the adequacy of resources

1A firm may take into account the following to assess if it would have adequate resources to carry out an orderly wind-down:

1. (1)

   A firm needs to have adequate financial and non-financial resources. A firm that leaves making the decision to wind down until it is too late risks breaching regulatory requirements, engaging in a disorderly wind-down, or even operating illegally while insolvent.

2. (2)

   Whether the firm has sufficient cash to meet monthly expenses during the wind-down period.

3. (3)

   The level of non-financial resources that are needed for wind-down and whether they are in place.

   Effective	Less effective
   Consider which key employees will be needed for an orderly wind-down but may want to leave the firm after the wind-down decision is made. An additional allowance to retain these employees during the wind-down period may be needed.	The firm only assesses its capital adequacy, and fails to assess its ability to meet monthly expenses during the wind-down period.