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Application provision

1.1 (1) Unless otherwise stated, this Part applies to every firm except:

    1. (a) an incoming firm;
    2. (b) a non-directive friendly society.
  1. (2) Chapter 5 (Annual Controllers Report) does not apply to a credit union.
  2. (3) The PRA directs that Chapter 2 (Obligations on Controllers) applies to persons required to give to the PRA a section 178 notice or a notice under section 191D of FSMA.

1

Application and Definitions

1.1

03/08/2015

  1. (1) Unless otherwise stated, this Part applies to every firm except:
    1. (a) an incoming firm;
    2. (b) a non-directive friendly society.
  2. (2) Chapter 5 (Annual Controllers Report) does not apply to a credit union.
  3. (3) The PRA directs that Chapter 2 (Obligations on Controllers) applies to persons required to give to the PRA a section 178 notice or a notice under section 191D of FSMA.

1.2

03/08/2015

In this Part, the following definitions shall apply:

acquiring control

has the meaning given in section 181 of FSMA, read in conjunction with the Exemption Order.

Annual Controllers Report

means the relevant form referred to in Chapter 6.6

ceasing to have control

has the meaning given in section 183(3) of FSMA, read in conjunction with the Exemption Order.

change in control

means any situation amounting to acquiring control, ceasing to have control, increasing control, or reducing control.

controller

has the meaning given in section 422 of FSMA, read in conjunction with the Exemption Order.

Controller’s Form

means the relevant form referred to in Chapter 6.1 to 6.5.

Exemption Order

means the Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (SI 2009/774).

increasing control

has the meaning given in section 182 of FSMA, read in conjunction with the Exemption Order.

investment manager

has the meaning given in the FCA Handbook from time to time other than for the purposes of the part of the FCA Handbook in Specialist sourcebooks that has the title Listing Rules.

reducing control

has the meaning given in section 183(1) and (2) of FSMA, read in conjunction with the Exemption Order.

section 178 notice

has the meaning given in section 178(3) of FSMA.

UK domestic firm

means a firm that has its registered office (or, if it has no registered office, its head office) in the United Kingdom.

2

Obligations on Controllers and Proposed Controllers

2.1

03/08/2015

The PRA directs that a person submitting a section 178 notice in accordance with section 178(1) of FSMA must do so using the relevant Controller’s Form.

2.2

03/08/2015

  1. (1) The PRA directs that a person who has submitted a section 178 notice  must notify the PRA immediately if the person becomes aware, or has information which reasonably suggests, that the person has or may have provided the PRA with information which was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a material particular.
  2. (2) The notification must include:
    1. (a) details of the information which is or may be false, misleading, incomplete or inaccurate, or has or may have changed;
    2. (b) an explanation of why such information was or may have been provided; and
    3. (c) the correct information.
  3. (3) If the information in (2)(c) is not immediately available for submission with the section 178 notice, the PRA directs that the information must instead be submitted as soon as possible.
  4. (4) The requirement in (1) ceases if the change in control occurs or will not take place.

2.3

03/08/2015

The PRA directs that a notice under section 191D of FSMA must provide details of the extent of control (if any) that the controller will have following the change in control.

2.4

03/08/2015

Where a controller or proposed controller that is an investment manager is complying with the directions in 2.1 and 2.3 in connection with the acquiring or disposal of listed shares in the course its fund management activity, the PRA  directs that it may use the Controller’s form at 6.5.

3

Obligations on Firms

3.1

03/08/2015

A UK domestic firm, other than a non-directive firm or a building society, must notify the PRA of:

  1. (1) a person acquiring control over the firm;
  2. (2) an existing controller increasing control over the firm;
  3. (3) an existing controller reducing control over the firm; or
  4. (4) an existing controller ceasing to have control over the firm.

3.2

03/08/2015

A building society or a non-directive firm must notify the PRA of:

  1. (1) a person acquiring control over the firm; or
  2. (2) an existing controller ceasing to have control over the firm

unless that person's acquiring or ceasing to have control is exempt from the notification requirement in sections 178 or 191D of FSMA by virtue of the Exemption Order.

3.3

03/08/2015

An overseas firm other than an incoming firm must notify the PRA of:

  1. (1) a person acquiring control over the firm;
  2. (2) an existing controller increasing control over the firm;
  3. (3) an existing controller reducing control over the firm; or
  4. (4) an existing controller ceasing to have control over the firm.

3.4

03/08/2015

The notifications in 3.1 to 3.3 must:

  1. (1) be made:
    1. (a) as soon as the firm becomes aware that a person, whether alone or acting in concert, has decided to acquire control, to increase control or to reduce control; or
    2. (b) if the change in control takes place without the knowledge of the firm, within 14 days of the firm becoming aware of the change in control concerned;
  2. (2) in relation to acquiring control or increasing control, contain as much of the following information as the firm is able to provide, having made reasonable enquiries from persons and other sources as appropriate:
    1. (a) the name of the firm;
    2. (b) the name of the controller or proposed controller and, if it is a body corporate and is not an authorised person, the names of its directors and its controllers;
    3. (c) a description of the proposed event including the shareholding and voting power of the person concerned, both before and after the change in control; and
    4. (d) any other information of which the PRA would reasonably expect notice;
  3. (3) in relation to a reducing control, contain the following:
    1. (a) the name of the controller; and
    2. (b) details of the extent of control (if any) which the controller will have following the reduction in control.

3.6

03/08/2015

  1. (1) A UK domestic firm must notify the PRA immediately if, in the period between a section 178 notice being submitted and the occurrence of the change in control, the firm becomes aware, or has information which reasonably suggests, that the person submitting the notice has or may have provided the PRA with information which was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a material particular.
  2. (2) The notification must include:
    1. (a) details of the information which is or may be false, misleading, incomplete or inaccurate, or has or may have changed;
    2. (b) an explanation why such information was or may have been provided; and
    3. (c) the correct information.

If the information in (2)(c) is not immediately available for submission with the notification, the information must instead be submitted as soon as possible.

3.7

03/08/2015

During the period referred to in 3.6, a UK domestic firm must take reasonable steps to keep itself informed about the circumstances of the controller or the proposed controller to which the notification related.

3.8

03/08/2015

A firm must notify the PRA:

  1. (1) when a change in control which was previously notified under 3.1 to 3.3  has taken place; or
  2. (2) if the firm has grounds for reasonably believing that the event will not now take place.

3.9

03/08/2015

The notification under 3.8 must be given within 14 days of the change in control or of having the grounds (as applicable).

4

Ongoing Notification Requirements

4.1

03/08/2015

A firm must notify PRA immediately it becomes aware of any of the following matters in respect of one or more of its controllers:

  1. (1) if a controller, or any entity subject to his control, is or has been the subject of any legal action or investigation which might put into question the integrity of the controller;
  2. (2) if there is a significant deterioration in the financial position of a controller;
  3. (3) if a corporate controller undergoes a substantial change or series of changes in its governing body;
  4. (4) if a controller, who is authorised in another EEA State as a MiFID investment firm, CRD credit institution or UCITS management company or under the Insurance Directives or the Insurance Mediation Directive, ceases to be so authorised (registered in the case of an IMD insurance intermediary).

4.2

03/08/2015

A firm must take reasonable steps to keep itself informed about controllers, including if applicable:

  1. (1) monitoring its register of shareholders (or equivalent);
  2. (2) monitoring notifications to the firm in accordance with Part 22 of the Companies Act 2006;
  3. (3) monitoring public announcements made under the relevant disclosure provisions of the Takeover Code or other rules made by the Takeover Panel;
  4. (4) monitoring the entitlement of delegates, or persons with voting rights in respect of group insurance contracts, to exercise or control voting power at general meetings.

5

Annual Controllers Report

5.1

03/08/2015

A firm must submit (or procure that another firm in its group submits) to the PRA, by electronic means, a written Annual Controllers Report which contains the information specified in the form referred to at 6.6, within four months of the firm's  accounting reference date.

Exemptions

5.2

03/08/2015

A friendly society or a building society is only required to submit a report under 5.1 if it is aware that it has a controller.

5.3

03/08/2015

In relation to a building society, a controller does not include a person who is exempt from the obligation to notify a change in control under the Exemption Order.

5.4

03/08/2015

An insurer need not submit a report under 5.1 to the extent that the information has already been provided to the PRA under IPRU(INS) 9.30 R (Additional information on controllers).

6

Forms

6.1

03/08/2015

The Controllers Form to be used by a limited company or limited liability partnership can be found here.

6.2

03/08/2015

The Controllers Form to be used by a partnership is can be found here.

6.3

03/08/2015

The Controllers Form to be used by an individual (other than in that individual’s capacity as a trustee, settler or beneficiary of a trust) can be found here.

6.4

03/08/2015

The Controllers Form to be used by a person in their capacity as a trustee, settler or beneficiary of a trust can be found here.

6.5

03/08/2015

The Controllers Form to be used by a person in their capacity as an investment manager can be found here.

6.6

03/08/2015

The Annual Controllers Report can be found here.