| Link(s): | FG24/5: Prudential assessment of acquisitions and increases in control | FCA FG24/5: Prudential assessment of acquisitions and increases in control |
Context
Alongside the PRA, the FCA consulted on proposals to replace the EU guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (3L3 Guidelines). The FCA has now published a Finalised Guidance document, FG24/5, setting out guidance to replace the EU guidelines.
Key points to note and next actions
Following the consultation, the PRA has issued a joint policy statement as well as a supervisory statement for PRA authorised firms. The FCA’s own final guidance sets out how it expects firms, and those acquiring or increasing control in UK authorised persons, to identify controllers for the purposes of FSMA. It also sets out:
- its expectations for submitting the change in control notification;
- the assessment criteria; and
- how it will use its statutory powers to impose conditions on an approval.
The Guidance is split into five main sections
- Introduction
- Controller concepts and identification (concepts include significant influence, aggregation of holdings and acting in concert, including further guidance on acting in concert at Appendix 2)
- Notices of proposed acquisitions and increases in control
- Assessment of the proposed acquisition
- The FCA’s approach to the use of conditional approvals
FCA authorised firms, and those persons to whom Part XII of FSMA applies, should follow this finalised guidance from 1 November 2024 instead of the 3L3 Guidelines when considering a UK Change in Control (CIC) transaction. The FCA Handbook and our website have been amended to make specific reference to the finalised guidance.
There are useful diagrams in the document within Annex 1 giving practical examples of the determination of controllers.