SIFA 12.3 Change of controller
To monitor, and in some cases give prior approval to, a firm's controllers we must receive the information we need from firms. We also need to monitor the impact of any significant change in the circumstances of one or more of a firm's controllers - for example, in their financial standing. The full definition of 'controller' may be found in the Handbook Glossary. Broadly, it includes anyone with a shareholding of 10% or more or anyone who is able to exercise significant influence over the management of the firm.
SUP 11 covers controllers and close links and applies to every firm apart from partnerships and sole traders. SUP 11.3 sets out the information which a controller must give us before becoming a controller or increasing the level of control held. The rules in SUP 11.4 to SUP 11.6 cover the notification requirements on firms. SUP 11.8 and SUP 11.9 require firms to notify us of changes in the circumstances of existing controllers and of changes in their close links.
When an individual or corporate body is purchasing shares which take their holding over 10% of the shares in the firm, Part XII of FSMA requires the new controller to complete and submit a Controllers Form A. A change in control also occurs when an existing controller increases or decreases control through levels of 20%, 33% or 50% (SUP 11.3.7 D to SUP 11.3.9 D).
If the proposed new controller is an individual they must also complete a Controllers Form B for approval. If the proposed new controller is a corporate body then the chief executive and one other director are each required to complete a Controllers Form B (SUP 11.3.7 D to SUP 11.3.9 D). These may not be required if these persons are approved persons who have completed an Approved Persons Form A within the previous 12 months.
New controllers and increases in control through one of the above thresholds need to be approved by us before they happen. Applications should be submitted within 14 days of parties becoming aware of the planned change. Approval must be sought from us in advance of the change and can take up to three months. You can submit change in control forms using Firms Online.
Should approval be granted, the new controller must also notify us when the change of control actually takes place (SUP 11.3.16 G).
Firms are also required to notify a change in control (SUP 11.4.2 R). The rules about the content and timing of the notification are at SUP 11.4.7 R. A firm must also notify us when a change in control which was notified has actually taken place (SUP 11.6.4 R).
In some cases separate notifications from both a firm and its controller would duplicate documentation. So we permit joint and shared notifications from both the firm and the controller (SUP 11.5.8 G to SUP 11.5.10 G and SUP 11.6.6 G).