When is a change in control application complete?

Under the Financial Services and Markets Act 2000 (FSMA) a person who decides to acquire or increase control over a PRA or FCA authorised firm must give the notice in writing to the PRA/FCA before making the acquisition. The notice must be in such form, include such information and be accompanied by such documents as the PRA/FCA may reasonably require. The PRA and FCA must publish a list of their requirements as to the form, information and accompanying documents for the notice.

FSMA also requires that the PRA/FCA must acknowledge receipt of a completed notice in writing before the end of the second working day following receipt. If the PRA/FCA receives an incomplete section notice it must inform the notice-giver as soon as reasonably practicable. 

Whether an application is complete is important because the PRA/FCA must determine applications within a period of 60 working days beginning with the day on which the PRA/FCA acknowledges receipt of the notice. 

So, when is a change in control application complete? As far as I am aware, the PRA/FCA provide no guidance on this point, however it seems reasonable that an application should be complete when it substantively meets the requirements as to the form, information and accompanying documents for the notice that the PRA/FCA have published. In practice, my experience is that the PRA/FCA often deem applications incomplete even when they meet this standard but the PRA/FCA require further information to determine the application, such as having questions on aspects of the application. However, FSMA has a provision precisely for this scenario where the PRA/FCA may ask the section notice-giver to provide any further information necessary to complete its assessment and "stop the clock" on the 60 working day assessment period for up to 20 or 30 working days (depending on the status of the notice-giver), which in my experience is rarely used by the PRA/FCA. 

The FCA publishes quarterly key performance indicators (KPIs), the latest of which state that 100% of change in control applications have been dealt with within the statutory timeframe. However, the KPIs do not show how long the PRA/FCA is taking to acknowledge applications as complete or the reasons why the PRA/FCA is deciding that applications are not complete. 

The PRA/FCA are often helpful in trying to work to determine change in control applications in line with transaction timelines, but their approach to determining whether applications are complete seems potentially out of line with the statutory framework. Better data on the approach the FCA is taking could help identify whether there is scope for making the change in control process quicker and more efficient. 

Omar Salem is a Managing Associate in the Financial Regulation Group at Linklaters, London.