Change in Control
FCA approval is mandatory before taking control of a regulated firm. Ensure you're compliant before making a move.
What you need to know
What is a Change in Control?
A Change in Control (CiC) occurs when someone intends to acquire or increase control of a regulated firm. This includes scenarios such as mergers, acquisitions, or significant changes in ownership. You must notify the FCA and receive prior approval before completing the transaction.
Why FCA approval is required
The FCA uses the CiC process to assess the suitability of the proposed controller and ensure the firm’s continued regulatory compliance. The transaction cannot be completed until approval is granted or the statutory assessment period ends without objection.
When you must notify the FCA
You are required to submit a CiC notification before any change takes effect. This applies to any merger, acquisition, or internal restructuring involving a change in ownership or control. Acting without FCA approval can lead to enforcement action, penalties, or trading restrictions.
What the FCA will assess
The FCA evaluates the financial stability, competence, and governance arrangements of the new controller. Their goal is to ensure the new leadership can maintain the firm’s compliance with regulatory obligations and continue operating responsibly.
Reasons for submitting a CiC
New investor gains significant influence
A new investor acquires 10% or more of your company’s shares or voting power, triggering the need for FCA notification and approval.
Existing shareholder increases control
An existing shareholder increases their holding beyond key thresholds of 20%, 30%, or 50%, requiring a reassessment of control.
Ownership changes through mergers or acquisitions
A merger or acquisition results in a shift in the firm’s ownership structure, altering who ultimately controls the regulated entity.
Group restructuring affects control
A parent company undergoes restructuring that impacts its control over a regulated subsidiary, necessitating FCA review.
Controller reduces their stake below threshold
A controlling shareholder reduces their interest, falling below the 10% control threshold, which also requires FCA notification.
Even a small change in ownership can trigger big regulatory consequences, which is why expert support matters.
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