Subject to any transitional relief, forms and templates applicable before 11pm Thursday 31 December 2020 should be read in conjunction with Supervisory Statement (SS) 2/19, which sets out how the PRA expects firms to interpret EU-based references in reporting and disclosure requirements and regulatory transactions forms after the UK’s withdrawal from the EU and the end of the transition period.
A person who decides to acquire or increase control in a dual-regulated firm (i.e. a firm jointly authorised by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority) must apply to us for approval. This is known as a ‘change in control’ application or a ‘Section 178 notice’.
You must get approval before effecting a change in control. It is a criminal offence under section 191F of the Financial Services and Markets Act (FSMA) to acquire or increase control without notifying us and receiving approval first. Inserting a holding company is considered a change in control event that we must approve in advance, even though the ultimate controller is not changing.
Who approves change in control decisions?
The following list sets out which regulator you should send your application to, and which regulator/s make the decision, based on the nature of the target firm and controller:
Target firm is dual regulated
Apply to us, we will determine whether to approve. The FCA may make representations to the FCA. Under section 187A of FSMA, the FCA may require the PRA to object to or impose conditions on money laundering/terrorist financing grounds.
Target firm is regulated by the FCA, but a member of its group is dual-regulated or proposed controller is dual-regulated, and the target firm is regulated by the FCA
Apply to the FCA, who will determine whether to approve. We may make representations to the FCA on any matter. Under section 187B of FSMA, the PRA may require the FCA to impose conditions in certain circumstances.
Target firm is regulated only by the FCA and is not part of a group containing a dual-regulated firm. Proposed controller is not a dual-regulated firm
Apply to the FCA, who will determine whether to approve.
Multiple targets within the same group which contain both dual regulated and FCA-regulated entities
Information is provided on a case-by-case basis. Email PRA-ChangeinControl@bankofengland.co.uk in the first instance.
The pre-application period is designed to help prospective controllers to understand the change in control process, increasing the likelihood that they will submit a complete application.
We may require additional supporting information. We recommend that you email us at PRA-ChangeinControl@bankofengland.co.uk to discuss whether a pre-application meeting is needed. Submitting your application without prior contact increases the likelihood of us deeming it incomplete.
Submitting your change in control application
Email a copy of your application form and supporting documents to at PRA-ChangeinControl@bankofengland.co.uk.
You must also send two hard copies to: PRA Authorisations, Authorisations Division, Prudential Regulation Authority, 20 Moorgate, London EC2R 6DA.
We do not charge a fee for processing change in control notifications.
How we assess change in control applications
We will follow the assessment procedure set out in sections 185 and 186 of the Financial Services and Markets Act 2000 (Controllers) Regulations 2009.
As part of this assessment, as well as assessing the proposed new controller, we will (in consultation with the FCA) consider the impact of a proposed change in control on the firm’s ability to comply and continue to comply with our prudential requirements, including the relevant threshold conditions. This may include, for example, the resilience of the target firm’s business model, capital and liquidity position, governance, risk management and controls, and the group structure.
We have 60 working days from acknowledging a complete section 178 notification to either:
- determine whether to approve the acquisition unconditionally
- propose to approve the acquisition subject to conditions
- propose to object to the acquisition.
If we decide during our review that we require further information, the clock can be stopped on the 60-day timeline while we seek this information.
If the application is approved, we will issue an approval notice. If we propose to object or to approve the change in control subject to conditions, we will inform the applicant by issuing a Warning Notice. This will include details of the appeals process.
Reductions in or cessations of control
Controllers must notify us in writing of a reduction or cessation of control before effecting the change, although our approval is not required.
You must provide us with the following details:
- details of the current and proposed shareholding in the authorised firm
- who the shares are being sold to.
Send these details to PRA-ChangeinControl@bankofengland.co.uk.
PRA Direction notice - 18 September and 16 December 2015
Joint European Supervisory Authorities Guidelines
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. The PRA and FCA comply with the Guidelines except the provisions relating to the identification of acquirers of indirect qualifying holdings.
Firms should continue to use the existing methodology as laid out in Part XII FSMA to identify proposed and/or existing controllers. For guidance on identifying controllers please refer to the 'quick reference guide'.
How we use your information
Information we collect
Through our authorisations forms, the Bank of England (the ‘Bank’) collects personal data about you. This personal data could include (depending on the application or notification form submitted) personal identification details, contact information, addresses, employment history and information relating to fitness and propriety such as criminal, civil and regulatory matters. Each form clearly states what personal data is being gathered. The Bank may make further enquiries and seek similar information from third parties and other data sources as we think appropriate to identify and verify information that we consider relevant to the application or notification, this could include criminal, credit and other background checks.
Why we need your personal data
The Bank collects personal data to process a range of authorisation applications and notifications, which include:
- New firm authorisations
- Senior Management Functions
- Waivers and Modifications of rules
- Variations and cancelling of Permissions
- Change in Control
- Standing Data
This information is used to assist the Bank of England in discharging its functions, in particular the statutory functions of the Prudential Regulation Authority under the Financial Services and Markets Act 2000 and other relevant legislation.
What we do with your personal data
In complying with applicable laws and for law enforcement purposes, we may disclose information to any government entity, regulatory authority or to any other person the Bank reasonably considers necessary. This may mean that personal data is transferred outside the United Kingdom. Otherwise, we will not disclose your information without your permission. Your personal data will be retained in accordance with the Bank’s records management schedule.
You have a number of rights under data protection laws. For example, you have the right to ask us for a copy of the personal data the Bank holds about you. You can also ask us to change how we process or deal with your personal data, and you may have the right in some circumstances to have your personal data amended or deleted. To contact us about those rights, including making a request for the personal data we hold about you, or to find out more about privacy and data protection at the Bank, please see the Privacy and the Bank of England page.