Q: Has there been a notifiable change to the firm's close links?
A: You should answer this question as appropriate for your firm.
There is a close link between the firm and another person or entity (CL) if the relationship between the two falls into one of the categories below.
- CL is a parent undertaking of your firm
- CL is a subsidiary undertaking of your firm
- CL is a parent undertaking of a subsidiary undertaking of your firm
- CL is a subsidiary undertaking of a parent undertaking of your firm
- CL owns or controls 20% or more of the voting rights or capital of your firm
- your firm owns or controls 20% or more of the voting rights or capital of CL
Further information can be found in COND 2.3.7 G (1)[1], with a flowchart at COND 2 Annex 1.
Q: What is a notifiable change in control?
A: A change of control occurs when an individual or a company acquires, increases or decreases control in an authorised firm.
In respect of personal investment firms and M&GI firms, the FCA must be notified if a change in control results in one or more of the following outcomes:
A) The change results in the controller holding 20% or more shares in an authorised firm or a parent undertaking.
B) The change results in the controller holding 20% or more of the voting power in an authorised firm or a parent undertaking.
C) The change results in the controller being able to exercise significant influence on the management of the authorised firm.
D) The change results in a controller ceasing to fall into A), B) or C).
An individual or company intending to acquire control of an authorised firm must obtain prior FCA approval using the appropriate form[2].