The PRA and FCA have confirmed updates to their guidance on the prudential assessment of acquisitions and changes in control of regulated firms. The joint PRA/FCA supervisory statement, and the FCA’s Finalised Guidance set out some clarifications to help with understanding what the regulators are looking for in change of control applications. Updates include:
- guidance on limited partnership structures to help identify controllers in the limited partnership structures that private equity firms and hedge funds typically use;
- clarification on what constitutes a “significant influence” to make it clear that influence could, for example, be through a shareholder board appointment, not just appointment on the board of the regulated firm;
- guidance on when persons who are becoming controllers may not be aware in advance of investments, nor have the ability to influence them, would or would not be regarded as having themselves “decided to acquire”;
- clarification that pre-notification engagement is neither an expectation nor a requirement;
- reminder from the FCA that according to FSMA it must notify the notice giver as to whether an application is complete within 2 working days of submission, and incomplete as soon as reasonably practicable – the FCA tries to notify applicants about missing information within 10 days.
The amended guidance has immediate effect from 1 November.