The crazy thing is jizzyjay, I think even the FCA acknowledges some of the shortfalls if you read details of their consultations and rule changes etc - segregated accounts / client funds is actually an extremely complicated area, and the FCA are constantly trying to tweak their rules to improve things.
I totally agree that the marketing of segregated accounts as being some kind of magic bulletproof protection is wrong, and it should be made much clearer that fund recovery could take months or even years as part of a combined insolvency process and/or FSCS claims process.
I found this document about some of the exact client fund issues that arose in the Lehman case. Some really complex technical issues in there, if the firms book-keeping has been suboptimal. But also shows why its so important that KPMG ties up all the loose ends.
http://www.shearman.com/~/media/File...etsArticle.pdf
I totally agree that the marketing of segregated accounts as being some kind of magic bulletproof protection is wrong, and it should be made much clearer that fund recovery could take months or even years as part of a combined insolvency process and/or FSCS claims process.
I found this document about some of the exact client fund issues that arose in the Lehman case. Some really complex technical issues in there, if the firms book-keeping has been suboptimal. But also shows why its so important that KPMG ties up all the loose ends.
http://www.shearman.com/~/media/File...etsArticle.pdf