Change in Control: Avoiding delays in FCA approval

While many think Change in Control (CiC) events only arise in large M&A deals, they often stem from much smaller incremental ownership changes. Even a 10% holding being crossed can trigger a full regulatory review. These smaller changes carry the same regulatory weight as major acquisitions and can stall transactions, unsettle investors, or invite supervisory scrutiny if mishandled.

What is a Change in Control

If you plan to acquire or increase “control” in an FCA authorised firm, you must notify the FCA in advance and obtain approval (a “Section 178 notice”). Completing your transaction without the regulator’s approval is a criminal offence.

The FCA has up to 60 working days to assess a complete notification. The clock pauses if it requests further information. 

When does ownership mean control?

The following bands indicate the levels of ownership at which the FCA considers a person to have acquired control of an authorised entity. A Section 178 notice must be filed before a threshold is exceeded and the transaction cannot proceed until the FCA has reviewed the proposal and issued its approval.

• Directive firms (e.g., MiFID investment firms, insurers, UCITS, payment/e-money institutions): 10%, 20%, 30%, 50% thresholds.

• Non-Directive firms (e.g., nonMiFID investment firms, general insurance intermediaries, full permission consumer credit, certain AIFMs): single band at 20%+ threshold.

• Limited permission consumer credit: 33% threshold.

• FCA registered crypto asset firms: 25%+ threshold.

   

Challenges firms face

Firms navigating a CiC often encounter a combination of regulatory, operational, and evidential challenges that can complicate even the most straightforward transactions.

Threshold calculations, ownership classifications and influence considerations that are not always intuitive, particularly for firms with layered shareholdings, international investors, or fund-based structures. Alongside this regulatory complexity, firms often struggle with the evidential burden required to satisfy the FCA’s assessment criteria; ownership charts, funding trails, governance rationale, and post-transaction oversight arrangements are rarely “regulator-ready” at the outset.

Documentation gaps, fragmented internal records, or unclear narrative explanations commonly lead to FCA follow-up questions, “stop the clock” pauses, and slower deal timetables. At the same time, aligning governance and people arrangements with the expectations of the post-deal structure can be challenging, particularly in founder-led businesses or firms experiencing rapid growth.

Ensuring proposed controllers can demonstrate appropriate skills, financial soundness, and credible oversight frameworks often requires more preparation than firms initially anticipate. When combined with time-sensitive commercial pressures, these factors mean that many CiC delays arise not because the transaction itself is problematic, but because the firm has not fully prepared the regulatory storyline, documentation, or governance model in advance.

Where we help

From complex acquisition structures to straightforward ownership changes, we support both the heavy lifting and the lighter administrative tasks. Whether you are navigating a multilayered fund structure or simply need someone to prepare and submit a standard Section 178 notification, we ensure every CiC submission is regulator-ready. Here is how:

1) Rationale: Get the trigger right

We assess whether your transaction crosses a threshold (or creates significant influence), so you are notified when required, and avoid unnecessary filings.

2) Regulatory framing: Make the case compelling

We draft your Section 178 pack to align with the FCA’s assessment criteria, reputation, financial soundness, governance/skills & experience, prudential resilience, and financial crime risk, anticipating likely queries and, where appropriate, conditions.

3) Resilience: Keep the timeline intact

We manage “stop the clock” risk by preparing answers and evidence up front, coordinating prompt responses so your 60-day assessment doesn’t drift.

What you get from us

• Controller analysis & threshold mapping (including acting in concert and fund/LP/GP structures).

• Ownership & funding transparency pack (source of funds/wealth, post-deal charts, governance changes).

• Regulatory business plan addendum explaining post-transaction strategy, risk, and oversight.

• Section 178 controller forms are prepared and submitted via Connect, plus liaison throughout the review.

• Q&A management with pre-agreed evidence to minimise interruption periods.

Engaging us to assist with your Section 178 pack is a natural precursor to our regulatory due diligence expertise, giving our team early sight of the target firm’s current and proposed structure.

Getting a CiC wrong can have serious regulatory and commercial consequences. Completing a transaction without prior FCA approval is a criminal offence and can expose individuals and firms to fines and enforcement action. The FCA may also object to the acquisition, impose restrictions on the firm’s permissions, and, in severe cases, even require the firm to cease authorised activities or unwind client positions, outcomes seen in past supervisory actions.

In short, even small ownership changes carry significant regulatory weight, and getting the CiC process wrong can disrupt operations, halt strategic transactions, and materially harm a firm’s reputation and regulatory standing.

Talk to us about your CiC

Whether you’re acquiring, restructuring, or onboarding new investors, we can help you navigate the regulatory approval process from preparation through to submission and review. Speak with our team about your upcoming transaction.