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    2019-05-07

WDPG App 7.1 Carrying out an impact assessment: who will be affected?

WDPG App 7.1.1 G

1In an impact assessment, a firm may ask the following questions to identify the stakeholders who may be affected by the winding down.

  1. (1)

    How might customers be affected by the wind-down? For instance, how many existing customers will the firm have to deal with if it is winding down now? How will the firm close transactions with these remaining customers and will customers be diligent in responding to the firm’s notices and ending their business relationship?

  2. (2)

    Does the firm have an effective system to maintain client and transactions records?

  3. (3)

    Does the firm need to execute risk-reducing trades and, if so, will it continue to have access to the right market counterparties to do so?

  4. (4)

    How will employees, trade suppliers, counterparties or other third parties be affected?

  5. (5)

    What are the potential tax implications of winding down?

    Effective

    Less effective

    Take into account the possibility of customers disputing transactions when closing out.

    Take the view that if a firm is insolvent the administrator will ultimately allocate the assets according to priority.