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 the PRA 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 table sets out which regulator you should send your application to, and which regulator/s make the decision:
|Nature of the target firm and controller||Who to apply to||PRA role||FCA role|
|Target firm is dual regulated||PRA||Determines whether to approve||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||FCA||The PRA 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||Determines whether to approve|
|Proposed controller is dual-regulated, and the target firm is regulated by the FCA.||FCA||The PRA 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||Determines whether to approve|
|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
||FCA||No role||Assesses and processes applications|
|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.
|For a proposed controller that is either a limited company or a limited liability partnership||Download form|
|For a proposed controller that is a partnership||Download form|
|For individuals||Download form|
|For trustees, settlers or beneficiaries of a trust||Download form|
|For FCA-authorised fund managers||Download form|
|For a firm undertaking an internal reorganisation||Download form|
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 prudential assessment of acquisitions and increases of qualifying holdings in the financial sector come 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'.