The Treasury has today announced the appointment of Peter Bloxham to review the special administration regime for investment banks (SAR).
He has already begun work. He will make his report to the Treasury by the end of January 2013. If, as expected, he recommends further work, a fuller report will follow by the end of June 2013.
Notes for editors
The Banking Act 2009 requires the Treasury to review the ‘Investment Bank Special Administration Regulations 2011’ by February 2013. The Act states that the review must be carried out by a person with expertise in the law of insolvency or financial services and that he or she must report to the Treasury on how far the regulations achieve their objectives and whether they should continue to have effect. The Treasury will lay the report before Parliament.
The initial review could recommend further work, as allowed for in the Act. This will be completed by June 2013. The review will be co-ordinated with the FSA’s own review of its Client Assets Rulebook, which is also expected to conclude at this time.
The SAR was developed in response to the Lehman administration. Three firms have been placed in special administration since the regulations came into force in February 2011: MF Global UK Limited, Worldspreads Limited and Pritchard Stockbrokers Limited.
The SAR was developed to increase the confidence of market participants in the effectiveness of the UK’s insolvency regime as it applies to investment banks. The statutory objectives of the SAR are:
identifying, protecting, and facilitating the return of, client assets
protecting creditors’ rights; ensuring certainty for investment banks, creditors, clients, liquidators and administrators
minimising the disruption of business and markets
maximising the efficiency and effectiveness of the financial services industry in the UK
Peter Bloxham was a partner at Freshfields (1983-2006), practising in restructuring and insolvency, with a focus on financial services. He was instrumental in setting up Freshfields’ “Restructuring and Insolvency” group and led it up to shortly before his retirement from the firm in 2006. He has since continued to practice on one off assignments, principally in the financial services sector.