FCA Change in Control
When is a Change in Control Required?
A change in control is required where there is a proposed change in the ownership or control of an FCA-regulated firm. Thresholds for control of Directive firms are defined in the following bands:
- 10% or more but less than 20%,
- 20% or more but less than 30%,
- 30% or more but less than 50%, and
- 50% or more.
A change in control is typically triggered where shares or voting rights are acquired or disposed of, new shareholders are introduced, existing shareholders increase or reduce their holdings, or there is a restructuring of ownership at group level. A change in control may also be triggered where there is a change in ultimate beneficial ownership, indirect control through holding companies, or changes to the composition of the board or senior management that affect control. Firms and proposed acquirers must notify the FCA in advance and obtain approval before the change takes effect.
What do the FCA expect?
When assessing a change in control, the FCA focuses on whether the proposed controllers are fit and proper and whether the change could adversely affect the firm’s ability to meet the threshold conditions on an ongoing basis.
The FCA will typically assess the identity and background of the proposed controllers, their financial standing, reputation and integrity, and the source of funds for the acquisition.
The FCA will also consider the impact of the change on the firm’s business model, governance, risk management, AML and financial crime controls, safeguarding arrangements where applicable, and operational resilience.
As part of the assessment, the FCA will often review whether the firm has been operating in line with its existing permissions and regulatory commitments and may raise detailed follow-up questions or request meetings before reaching a decision.
How can The Payment Practice Help?
We support firms, shareholders and acquirers throughout the change in control process.
We prepare and coordinate all required submissions through the FCA application portal, support the preparation of controller documentation and fitness and propriety information, and manage ongoing communications and regulatory information requests.
We also help firms assess and address any regulatory gaps identified as part of the FCA’s review and prepare directors, shareholders and proposed controllers for FCA meetings or interviews.
Our aim is to ensure change in control applications are well-structured, credible and progressed efficiently, avoiding delays or unexpected supervisory concerns.