COVID-19, FCA Statement on financial services exemptions in forthcoming Corporate Insolvency and Governance Bill

Regulatory Updates | 15/05/20

The Financial Conduct Authority (FCA) has published a statement on provisions expected to be included in the Corporate Insolvency and Governance Bill that will affect the financial services sector. The Bill provides measures to:
• create a moratorium during which no legal action can be taken against a company without leave of the court;
• suspend Ipso Facto (termination) clauses when a company enters an insolvency or restructuring procedure, increasing the chance that a business is rescued; and
• temporarily suspend wrongful trading provisions from 1 March 2020 for three months, to temporarily remove the threat of personal liability arising for directors who continue to trade a company through the coronavirus pandemic with the uncertainty that the company may not be able to avoid insolvency in the future.