Applicant questions
- - What happens if the business stops, loses a key person, fails to raise capital, or must exit a product or jurisdiction?
- - How are clients, assets, complaints, records, vendors, and regulatory notifications handled?
- - Who makes wind-down decisions and what triggers escalation?
Why regulators ask
- - Wind-down evidence shows the applicant can protect clients and markets if the business fails or changes materially.
- - Orderly exit planning connects capital, custody, outsourcing, records, complaints, and governance.
- - A weak wind-down plan suggests the applicant has not thought through downside scenarios.
What good looks like
- - wind-down triggers, decision owners, client communications, asset transfer, records, vendor exits, and regulatory notices are mapped.
- - The plan is consistent with capital runway, custody model, outsourcing dependencies, and complaint handling.
- - The firm can explain what happens to clients if approval, revenue, or key people do not materialise.
Documents to prepare
- - Wind-down plan.
- - Client and asset transfer steps.
- - Records retention and access plan.
- - Vendor exit plan.
- - Regulatory notification and board decision workflow.
Red flags
- - The plan says the firm will stop trading but does not explain client assets or records.
- - No wind-down trigger is linked to capital runway.
- - Critical vendors, custodians, or administrators are missing from the exit plan.
Build steps
- 1. Identify wind-down triggers from capital, people, compliance, vendor, and market scenarios.
- 2. Map client, asset, complaint, records, and notification steps.
- 3. Test the plan against custody, outsourcing, and financial forecast assumptions.
Disclaimer
Information on LicenseCompare is for general educational purposes only and does not constitute legal, regulatory, financial, tax, investment, or professional advice. Licensing requirements depend on facts and change over time. Always consult official regulator materials and qualified professional advisers.