FCA Change in Control
If you are planning to acquire or increase your control of an FCA-regulated firm, either as an individual or a company, you must seek prior approval from the FCA. Regulated firms must notify the FCA of any proposed or actual change in control.
Meeting your obligations
Depending on the scale and potential implications of the proposed change, seeking FCA authorisation for a Change in Control can be a complex and demanding process.
You will need to persuade the FCA that any proposed change is in the interests of both customers and the market as a whole. This can mean producing significant amounts of supporting documentation and responding appropriately to the FCA’s follow-up questions. But failure to secure authorisation in advance – or to notify the FCA of any intended change – is a criminal offence for which, if indicted, you will be liable to pay a substantial fine.
What constitutes an FCA Change in Control
A Change in Control is considered to have taken place whenever one entity gains or increases its control of an FCA-regulated firm and/or when another entity decreases or gives up control. Exactly how ‘control’ is defined depends on the type of firm involved.
Section 178 notification
FCA Change in Control notifications are known as Section 178 notices. You should notify the FCA as soon as you make the decision to acquire or extend a degree of control in an FCA-regulated firm.
As part of your Section 178 submission, you will need to submit the following:
- Completed Section 178 notification forms for every individual or entity proposing to take control, together with all relevant supporting documents
- A Regulatory Business Plan
- Financial projections
- A structure chart showing before and after positions.
- If you are seeking to become a controller of a firm authorised under the MiFID Directive, you will need to complete the MiFID version of this form.
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