WDPG App 8 QRG: operational analysis

In an operational analysis, a firm may adopt the following structure to work out what steps may need to be taken in its winding down:

1. (1)

   The starting point of the wind-down timeline is when the wind-down decision is made. The end point is when the regulatory permission is successfully cancelled.

2. (2)

   Numerous actions need to occur after the wind-down decision is made and these populate the timeline sequentially.

3. (3)

   The estimated length of the wind-down period can then be calculated from the sequence of the individual actions’ durations.

4. (4)

   This in turn allows an assessment of what resources (both financial and non-financial) would be needed to implement it.

Factors which a firm may consider:

1. (1)

   How might the firm announce the wind-down decision and manage its communications policy? Will this be sufficient to deal with a “run” on the firm?

2. (2)

   How will the firm reconcile clients’ business records and ensure their interests are not affected? For instance, if a firm has to return client monies and assets when winding down, how would it do this?

3. (3)

   Who needs to be available to assist the firm in winding down?

4. (4)

   How would the firm deal with redundancies and, conversely, which employees need to be retained with special financial arrangements?

5. (5)

   What systems (e.g. IT systems) need to be available to the firm during the winding down?

6. (6)

   Will the firm need to engage professional advisors to wind down?

7. (7)

   Has the firm considered the implications for any overseas offices and branches?