Change of control and acquisitions.
Buying or selling a licensed firm is a regulatory transaction before it is a commercial one. We prepare the controller's case and run the change-in-control notification alongside whoever is broking the deal.
Why the regulator comes first
In the UK, anyone proposing to acquire or increase control of an FCA-authorised firm must notify the FCA and have its approval before completing. Completing without it is a criminal offence, and the regulator has powers over the shares acquired. The EU regimes work on the same principle: the regulator assesses the acquirer before the acquirer owns anything.
A deal that has been negotiated, priced and documented can still fail at this stage — and when it fails here, it fails late. The time to find out whether an acquirer is approvable is before the heads of terms, not after them.
What the regulator assesses
Who the acquirer is
Every person in the chain of control, up to the ultimate beneficial owners: their reputation, their experience, and their other interests.
Where the money comes from
The source of the funds for the acquisition, and of the acquirer's wealth — evidenced, not asserted. This is where most notifications slow down.
What the acquirer plans to do
The business plan for the firm under new ownership — changes to its model, its management and its capital — and whether it will still meet its conditions for authorisation afterwards.
Who will run it
New senior managers need approval in their own right, and the regulator looks at the board as it will be, not as it was.
Financial soundness
Whether the acquirer can support the firm, including through a period of losses, and whether the structure of the deal leaves the firm able to meet its own capital requirements.
How we work on a transaction
We work alongside the deal, not in place of it. The commercial side — finding the counterparty, negotiating the price, the sale and purchase agreement — belongs to the parties and their brokers, corporate finance advisers and lawyers.
We take the regulatory side: an early view on whether the acquirer is approvable and what the regulator will ask; the notification itself, with its supporting evidence; the approved-person applications for incoming senior managers; and the regulator's questions that follow, through to its decision.
For sellers
A firm preparing for sale can make itself easier to buy: a clean regulatory record, current policies, no open matters with the regulator, and a clear account of who holds which function. Doing that before a buyer's due diligence begins saves time on both sides of the table.
When the licence is the asset
Some acquisitions are made for the licence itself, as a shorter route into a market than a first authorisation. Sometimes that is right. Often the licence carries the old business model with it, and the variation or remediation needed afterwards is larger than a fresh application would have been. We will tell you which we think it is before you commit.