Miscellaneous Control over authorised persons
Where a person ("controller") decides to acquire control of a UK authorised firm (defined as taking an ownership stake of 10% or more), the proposed controller will need to seek approval from the relevant regulator before the interest is acquired. This is done by the means of giving notice in line with section 178 of FSMA 2000. The regulators will then make a decision about whether to approve or reject the change in control based on a number of criteria:
The reputation of the section 178 notice-giver;
The reputation and experience of any person who will direct the business;
The overall financial soundness of the section 178 notice-giver;
Whether the UK financial services firm will be able to comply with its prudential requirements (including the threshold conditions – the minimum requirements for the financial services firm to be authorised and stay authorised - in relation to its regulated activities);
Whether, if the UK financial services firm is to become part of a group as a result of the acquisition, that group has a structure which makes it possible to exercise effective supervision, exchange information among regulators and determine the allocation of responsibly among regulators.
Whether there are reasonable grounds to suspect that the new controller is connected with money laundering or terrorist financing or that the risk of this activity could increase.
	In making an assessment, the appropriate regulator must disregard the economic needs of the market.
	Currently, the PRA and the FCA can approve or reject an application for a change in control, and they can also impose conditions, but only where they would otherwise reject the application. This limit to the scenarios where the regulators can impose conditions was introduced through the EU Acquisitions Directive (2007/44/AC).
	There are some situations where the evidence may not reach the "reasonable grounds" threshold needed to reject a decision, but the relevant regulator still has significant concerns. For example, an investigation may be ongoing while the change-in-control process is taking place and may conclude in due course in a finding that adversely impacts the reputation of the new controller. This situation may therefore warrant a condition on a change-in-control.
	The Act provides for the regulators to apply conditions to new controllers where they have concerns which affect their ability to advance the regulators’ objectives, rather than in the narrower set of existing circumstances.