A change of control application is the notice a buyer gives the FCA before it acquires or increases control of an authorised firm. The FCA calls it a change in control, and the notice is a section 178 notice under the Financial Services and Markets Act 2000, Part XII (FSMA). The FCA assesses the buyer and decides whether to approve the acquisition, approve it with conditions or object to it.
The same regime applies, with modifications, to payment institutions under the Payment Services Regulations 2017 and to e-money institutions under the Electronic Money Regulations 2011. For dual-regulated firms, such as banks, building societies, insurers and major investment firms, the buyer applies to the Prudential Regulation Authority (PRA), which consults the FCA.
Each person who will become a controller notifies separately. A controller is anyone who holds the relevant percentage of shares or voting power in the firm, or in a parent of the firm, or who can exercise significant influence over its management. A group with several layers of holding companies therefore files several notices for one transaction.
The thresholds depend on the type of firm being acquired. The FCA publishes them on its control thresholds and bands page, last updated 30 June 2026.
| Firm acquired | Control thresholds |
|---|---|
| Payment institutions and e-money institutions | 10%, 20%, 30% and 50% |
| Banks, insurers, MiFID investment firms, UCITS managers | 10%, 20%, 30% and 50% |
| Non-MiFID investment firms, general insurance intermediaries, full-permission consumer credit, home finance, AIFMs | A single threshold of 20% |
| Limited-permission consumer credit firms | A single threshold of 33% |
| FCA-registered cryptoasset firms with a beneficial owner | 25% |
For firms with four bands, approval is needed each time a buyer moves into a higher band. Moving within a band needs no notice, unless the buyer would become a new parent undertaking of the firm. For firms with a single 20% threshold, a controller already above 20% does not need approval for later increases, although related parties who would become controllers still need to be considered.
Control runs up the ownership chain. A company that owns a shareholder of the regulated firm is itself a controller if its holding, traced through, reaches a threshold. Parent undertakings of minority shareholders are treated as controllers, and holdings across a group's subsidiaries are added together.
Control is not only a percentage. A holding that gives significant influence over management, through board appointment rights, vetoes over budgets or business plans, or a shareholders' agreement, can make an investor a controller below the numerical threshold. The FCA's finalised guidance FG24/5, published on 1 November 2024, lists the factors it considers. People acting in concert are assessed as one controller.
Approval must be in place before control passes. Acquiring or increasing control without approval is a criminal offence under section 191F of FSMA and can lead to a fine. Where control has passed without approval, the FCA expects to be told as soon as possible, and it can restrict the voting rights attached to the shares or apply to the court for their sale.
The parties can sign the deal before approval, provided completion is conditional on it. Share purchase agreements normally make FCA approval a condition precedent and set a long-stop date that allows for the full assessment period. Until approval, the buyer should not take management control, appoint directors or exercise voting rights through side arrangements, because that can itself amount to acquiring control.
If someone becomes a controller without knowing it, for example because a parent company was acquired elsewhere in a group, section 178 is unlikely to have applied, but the new controller must still notify the FCA as soon as it becomes aware.
FSMA section 189 gives the FCA 60 working days to assess a notification, counted from the date it acknowledges the notification as complete. Under section 190 it may interrupt that period once to ask for further information.
| Stage | Statutory period |
|---|---|
| Assessment period | 60 working days from acknowledgement |
| Interruption for further information | Up to 20 working days, once |
| Interruption where the buyer is based or regulated outside the UK, or not supervised under UK financial services law | Up to 30 working days, once |
The FCA reports its performance each quarter. In Q1 2026/27 its median time to determine a change in control was 43 calendar days from receipt, with three quarters of cases decided within 71 days. A notification is complete only when every controller's form, the ownership chart, the funding evidence and, for buyers taking more than 50%, the business plan are in. A proposed corporate controller that has not yet been incorporated keeps the notification incomplete.
For transaction planning, the firm allows around three months from submission to approval for a straightforward acquisition with a clear ownership chain, and longer where the buyer is overseas, the group has several layers or the plan changes the business materially.
The FCA applies five criteria set out in section 186 of FSMA, and it may object only on these grounds or where the information supplied is incomplete.
| Criterion | What the FCA looks for |
|---|---|
| Reputation of the buyer | Integrity and competence, including regulatory history in every country, convictions, disputes and past business conduct |
| Reputation and experience of new managers | Directors and senior managers the buyer will appoint, and whether they can run the firm |
| Financial soundness | The buyer's own finances and whether the funding of the deal is secure, with a clear source of funds |
| Continued compliance | Whether the firm will keep meeting its prudential and conduct requirements, and whether the group structure allows effective supervision |
| Financial crime | No reasonable grounds to suspect money laundering or terrorist financing connected with the acquisition |
Complex structures are acceptable when they are explained. The FCA looks at the whole group, including related parties and close links, and gives particular attention to private equity and financial sponsor buyers, leveraged acquisitions and strategic intentions for the firm.
Notifications are made through Connect using the FCA's change in control forms: individual forms for people and corporate forms for companies, one for each controller. The FCA's change in control pages set no application fee.
The business plan is where most questions arise. It sets out the buyer's strategy for the firm over three years: products, markets, regulated activities, governance, staffing, outsourcing, systems, financial crime controls and financial forecasts. It should reflect the business after completion, not the seller's historic figures. For payment and e-money institutions it also covers capital, safeguarding under CASS 15 and continuing obligations under the Payment Services Regulations or Electronic Money Regulations.
The FCA wants to see where the purchase money comes from and, for individuals and beneficial owners, how their wider wealth was built. Bank statements, audited accounts, loan agreements, sale proceeds and dividend records are the usual evidence. Funding that passes through several entities needs each step documented, and a lender or investor providing the money can itself become a controller. The funding structure should be settled before submission.
Payment and e-money institutions are the most frequently acquired FCA firms, and the FCA assesses buyers of them with a prudential focus: suitability, financial soundness and sound and prudent management. The four bands of 10%, 20%, 30% and 50% apply, along with significant influence, under the modified Part XII provisions in the Payment Services Regulations 2017 and the Electronic Money Regulations 2011.
The FCA looks closely at what the buyer will do with customer funds. The business plan should show who will oversee safeguarding under CASS 15, which bank or insurer will hold the safeguarded funds, how capital will be maintained against the new forecasts and whether the agents and distributors will change. Where the buyer will replace the directors or the person responsible for anti-money laundering, the new people are assessed at the same time.
A buyer can reach the market by acquiring an authorised firm or by applying for its own authorisation. The choice turns on time, cost and what comes with the firm.
| Factor | Acquire an authorised firm | Apply for a new licence |
|---|---|---|
| FCA timetable | 60 working days from a complete notification | FCA median of 219 days in Q1 2026/27 for payment and e-money firms |
| Banking and safeguarding | Existing accounts, subject to change of control clauses | Opened during the application |
| History | Inherits the firm's supervisory record and liabilities | Starts with no history |
| Business plan | Assessed as a change to an existing firm | Assessed in full as a new firm |
An acquisition is quicker where the target's permissions, controls and banking match the buyer's plan. Where the buyer's model differs materially, the change of control and a variation of permission together can take as long as a new application.
For banks, building societies, insurers and PRA-designated investment firms, the buyer files the section 178 notice with the Prudential Regulation Authority. The PRA leads the assessment and consults the FCA, and the same 60 working day period and interruption rules apply. The PRA gives particular weight to capital, liquidity, the buyer's ability to support the firm in stress and the risk of contagion from the wider group.
A group acquiring several regulated entities at once, for example a bank and an investment firm in the same group, files notices with each regulator responsible. The regulators coordinate, but each decision is separate, and completion waits for all of them.
The FCA has three outcomes available: approve the acquisition, approve it subject to conditions, or object. Conditions are used to ensure the firm continues to be managed soundly, for example a limit on the holding, a requirement on board composition or a commitment on capital. The FCA may object only on the section 186 criteria or where the information supplied is incomplete.
If the FCA proposes to object or to impose conditions the buyer has not agreed, it issues a warning notice and the buyer can make representations. A decision notice follows, which the buyer can refer to the Upper Tribunal. If the FCA does not decide within the assessment period, it is treated as having approved the acquisition without conditions. Case officers normally raise concerns during the assessment, and these can often be resolved with further information or an amended plan.
The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 changed the change in control regime for FCA-registered cryptoasset firms from 30 June 2026, aligning it with the new FSMA cryptoasset regime. The FCA's cryptoasset change in control page sets out two routes.
A buyer of a registered cryptoasset firm should also plan for the FSMA cryptoasset regime. The FCA application window runs from 30 September 2026 to 28 February 2027 and the regime commences on 25 October 2027. An existing registration does not carry over automatically, so the firm's readiness for authorisation is part of the value being bought. The firm's guide to the FCA cryptoasset regime covers the transition.
A regulated firm is worth what its permissions, controls and banking relationships are worth. Due diligence before signing confirms what the buyer is acquiring and shapes the business plan the FCA will review.
The firm's article on due diligence for investors in financial services companies sets out a fuller checklist.
Approval of the change of control does not approve later changes. Each needs its own process, and the business plan should list them so the FCA sees the full picture at once.
| Planned change | What it needs |
|---|---|
| New senior managers or directors | Senior manager approval for FSMA firms; notification and fitness assessment for payment and e-money firms |
| New MLRO or compliance officer | Approval or notification, depending on the regime |
| New regulated activities or products | A variation of permission before launch |
| New safeguarding bank or method | Updated safeguarding arrangements and notification |
| Material outsourcing | Advance notification to the FCA |
Senior manager and variation applications can be submitted alongside the change of control so that all approvals arrive together.
Sellers shorten the timetable by preparing the firm before marketing it. Regulatory returns should be current, the register of shareholders and the ownership chart accurate, and any known issue covered by a remediation plan. Contracts that need counterparty consent on a change of control should be identified early.
The seller and the existing board remain responsible for the firm's compliance until completion, and the firm must cooperate with the FCA's assessment of the buyer. Information the firm supplies must be accurate and complete, because the FCA can act against the firm for misleading information whatever the outcome of the notification.
The firm advises buyers and sellers on transactions and change of control, and its marketplace lists licensed companies for sale, including payment and e-money institutions, for buyers who prefer to acquire an authorised firm rather than apply for a new licence.
The FCA has 60 working days from acknowledging a complete notification, plus one interruption of up to 20 working days, or 30 for overseas buyers. Its median in Q1 2026/27 was 43 calendar days from receipt.
For payment institutions, e-money institutions, banks, insurers and MiFID firms the bands are 10%, 20%, 30% and 50%. Most other FSMA firms use a single 20% threshold, limited-permission consumer credit firms 33%, and registered cryptoasset firms 25% where there is a beneficial owner.
Yes. The share purchase agreement can be signed with completion conditional on approval, but control must not pass until the FCA approves.
The FCA's change in control pages set no application fee. The costs are in preparing the forms, business plan and funding evidence.
It is a criminal offence under section 191F of FSMA and can lead to a fine. The FCA can also restrict the voting rights of the shares or seek a court order for their sale.
Only if the holding reaches a threshold, directly or through a parent, or gives significant influence over management through rights such as board seats or vetoes.
Yes, where the buyer will hold more than 50%. The plan covers the strategy, governance, controls and three-year forecasts for the firm after completion.
The Prudential Regulation Authority, which consults the FCA. Both regulators assess the buyer before completion.
Buckingham Capital Consulting has obtained FCA authorisations for payment and e-money firms including Nexpay, Orbital, Global Send, Dzing Finance and Hryze since 2013, and advises buyers and sellers of regulated firms on change of control. The firm maps the controller chain, prepares the notifications, business plan and funding evidence, and manages the FCA's questions through to approval.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.