Part XII of the Financial Services and Markets Act 2000 (FSMA 2000) requires controllers and proposed controllers to seek approval from the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) before acquiring or increasing control in a UK authorised firm, and to notify the relevant regulator when decreasing or ceasing control in a firm. The FCA and PRA also require UK authorised firms to notify them when a person reduces or ceases to have control in the firm.

This Practice Note looks at the criminal and regulatory consequences of failing to comply with the change of control regime set out in FSMA 2000, Part XII and the related FCA and PRA rules. It also provides an overview of the powers that the FCA and PRA have under the controllers regime to:

1. •

   object to a person having control over a UK authorised person

2. •

   impose restrictions on shares or voting power which have been acquired improperly, and

3. •

   order the sale of shares or disposition of voting power

In addition, this Practice