REC 4.2C Control over a UK RIE

1Chapter 1A of Part XVIII of the Act places an obligation on controllers and proposed controllers of UK RIEs to notify the FSAof acquisitions of or increases in control. Furthermore, those persons are required to obtain the FSA's approval before becoming a controller or increasing the level of control held (in certain circumstances).

The FSA will approve an acquisition ofcontrol if it is satisfied that the acquisition of control by the person seeking approval does not pose a threat to the sound and prudent management of any financial market operated by the UK RIE.

If a proposed controller or controller has complied with the obligation to notify, the procedure the FSA will follow if it approves or does not approve of that person becoming a controller or increasing the level of control held is set out in section 301C of the Act.

If a controller or proposed controller has not complied with the duty to notify, the procedure the FSA will follow if it approves or does not approve of that person becoming a controller or increasing the level of control held is set out in section 301D of the Act.

If the FSA becomes aware of matters as a result of which it is satisfied that the criterion set out in REC 4.2C.2 G is not met, the procedure it will follow is set out in section 301D of the Act.

The FSA's internal arrangements provide for any decisions to refuse to approve a change of control of object to an existing control to be taken at an appropriately senior level.

If the FSA refuses to approve a change of control or objects to an existing control, the person concerned may refer the matter to the Tribunal (see EG 2.39).2

The powers the FSA can exercise in the event that a person acquires or continues to exercise control notwithstanding the FSA's refusal to approve the acquisition of control or the FSA's objection to the exercise of control are set out in section 301Eof the Act.

The offences for which a person who fails to comply with the obligations set out in Chapter 1A of Part XVIII of the Act is liable are set out in section 301Fof the Act.