Individuals or companies that wish to acquire or increase control in a firm that we regulate must seek our prior approval.
Update – February 2022
We have seen a significant increase in s.178 notifications over recent months. Due to these high volumes, we have experienced delays in allocating FCA-led notifications to case officers. Currently, there is a delay of approximately two months between submission of a complete notification and allocation to a case officer.
A substantial proportion of the notifications we receive are incomplete. We process these incomplete submissions on longer timelines than complete notifications. To avoid delays in processing your notification once it has been allocated, we recommend that you provide all relevant information and documents in your initial submission. You can find more information on how to ensure your notification is complete on this page.
We will allocate your notification as soon as a case officer becomes available, and confirm whether it is complete as soon as possible after that point. In the meantime, please be aware that it is a criminal offence to proceed with the transaction before we have made a decision (or before the statutory assessment period has expired). The process and penalties which may apply where these obligations are not met can be found in section s191F of FSMA. For more information on your obligations, please refer to this page.
We are recruiting additional case officers, and are making improvements as part of the FCA’s Transformation programme to reduce the time taken to allocate and determine cases. You can find more information on the Transformation programme in our 2021/22 Business Plan, here.
Dual-regulated firms (banks, building societies, credit unions etc) need to obtain approval from the Prudential Regulation Authority.
A change in control can also take place when an existing controller of a firm decreases its control. See FSMA section 191D or SUP 11 in our Handbook for full details of the thresholds and requirements.
It is a criminal offence under FSMA section 191F to:
- acquire or increase control without notifying us first
- fail to obtain prior approval in such circumstances
You may also be liable on indictment to a fine that exceeds the statutory minimum.
Our quick reference guide (PDF) provides a definition of controllers, the various control bands and an example structure chart.
Notifications for changes in control are known as Section 178 notices. You should send us a notification as soon as you have made a decision to acquire a control in an authorised firm. Making a decision to acquire could, for example, include circumstances where a proposed controller decides not to take any action to prevent or reduce its increase in control to below the relevant threshold.
We have up to 60 working days (excluding any interruption period) to assess a change in control case. This period begins on the day we acknowledge receipt of a complete Section 178 notice.
Joint committee guidelines on acquisitions and increases of qualifying holdings
The Joint European Supervisory Authorities (ESA) guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector came into force on 1 October 2017.
Following the UK’s withdrawal from the EU, we expect firms and market participants to continue to apply these guidelines to the extent that they remain relevant. Likewise, we will continue to apply these guidelines in respect of our own functions in the same manner as before (interpreting them in light of associated legislative changes).
Firms should use the existing methodology laid out in Part XII FSMA to identify proposed and/or existing controllers
For guidance on identifying controllers, refer to our quick reference guide (PDF).
We have other pages in this section which cover: