On 14 October 2019, the FCA published a new webpage explaining how to submit a notification for a change in control. The FCA states that the guidance contained on the webpage is not an exhaustive list and there may be additional factors that need to be considered on a case-by-case basis.
The FCA states that some change in control notifications take longer because the business plan is not detailed enough. To help firms, the FCA has published a business plan contents template which provides that the following sections should be included:
- business to be undertaken. This should explain how the businesses will be run going forward and any planned changes to the regulated activities and strategy of the target firm(s). The FCA expects to see complete projected financials that explain how firms will maintain their minimum capital requirements;
- This should provide an overview of the firm’s governance arrangements, including board composition and any board sub-committees;
- This should include an organisation chart that shows key staff and roles, including all controllers and close links, what business they conduct and whether they are regulated. Firms should explain the rationale for the appointment and suitability of members of the governing board, the compliance officer and other Approved Persons. They should describe the background and experience of those individuals performing significant, influence-controlled functions such as directors or senior managers;
- Firms should think about what areas of the business are going to be outsourced and how this will be overseen; and
- systems and controls / risk management. This should consider how a firm will identify and manage conduct risks. It should also provide an overview of the firm’s financial crime controls, anti-money laundering procedures and due diligence processes.
The FCA has also published a new webpage on change of control notification forms, setting out links to the forms required to submit a notification for a change in control.