SUP 11.2 Purpose

Part XII of the Act (Control Over Authorised Persons6) places an obligation on the controllers and proposed controllers of those UK domestic firms not listed in SUP 11.1.1 R (1) to SUP 11.1.1R(8)4 to notify the appropriate regulator6 of changes in control, including acquiring, increasing or reducing control or ceasing to have control over a firm.3 Furthermore, those persons are required to obtain the appropriate regulator's approval6 before becoming a controller or increasing their control over a firm3. SUP 11.3 is intended to assist those persons in complying with their obligations under Part XII of the Act.

The rules in SUP 11.4 to SUP 11.6 are aimed at ensuring that theappropriate regulator receives the information that it needs to fulfil6 its responsibility to monitor and, in some cases, give prior approval to firms' controllers.21

As the approval of the appropriate regulator6 is not required under the Act for a new controller of an overseas firm, the notification rules on such firms are less prescriptive than they are for UK domestic firms. Nevertheless, the appropriate regulator6 still needs to monitor such an overseas firm's continuing satisfaction of the threshold conditions, which normally includes consideration of a firm's connection with any person, including its controllers and parent undertakings (see the threshold conditions set out in paragraphs 3B, 4F and 5F of Schedule 6 to the Act). The appropriate regulator6 therefore needs to be notified of controllers and parent undertakings of overseas firms.

As part of the appropriate regulator's6 function of monitoring a firm's continuing satisfaction of the threshold conditions, the appropriate regulator6 needs to consider the impact of any significant change in the circumstances of one or more of its controllers, for example, in their financial standing and, in respect of corporate controllers, in their governing bodies. Consequently, the appropriate regulator6 needs to know if there are any such changes. SUP 11.8 therefore requires a firm to tell the appropriate regulator6 if it becomes aware of particular matters relating to a controller.

Similarly, the appropriate regulator6 needs to monitor a firm's continuing satisfaction of the6 threshold conditions6 set out in paragraphs 3B, 4F and 5F of Schedule 6 to the Act (as applicable) (in relation to threshold conditions for which the FCA is responsible,6 see COND 2.32), which requires that a firm's close links are not likely to prevent the appropriate regulator's6 effective supervision of that firm. Accordingly the appropriate regulator6 needs to be notified of any changes in a firm's close links. This requirement is contained in SUP 11.9.2

Every firm, other than a firm listed in SUP 11.1.1 R (1) to SUP 11.1.1R(8)4 or a firm excluded from the operation of SUP 16.4 or SUP 16.5 by SUP 16.1.3 R, is required to submit an annual report on its controllers and close links as set out in SUP 16.4 and SUP 16.5.

The requirements in SUP 11 implemented5 certain provisions relating to changes in control and close links which were5 required under the Single Market Directives.2

2An event described in SUP 11.4.2R, SUP 11.4.2A R and SUP 11.4.4R3is referred to in this chapter as a "change in control".