2 month delay to appoint case officers for FCA change in control applications

The FCA has updated its change in control webpage to acknowledge the delays in processing applications that have been taking place. It says these are due to "a significant increase" in change in control applications over recent months and that: "due to these high volumes, we have experienced delays in allocating FCA-led notifications to case officers. Currently, there is a delay of approximately two months between submission of a complete notification and allocation to a case officer."

Although these delays are already widely known about they are concerning for firms who need to wait for FCA approval to close transactions involving the sale of an FCA authorised firm. My experience is that once a case officer is appointed that they work hard and conscientiously to meet transaction timelines. However, there is only so much they can do when they are appointed so late. Firms and funding markets are therefore facing significant uncertainty and delay due to the FCA's delay in appointing case officers.

The FCA appears to blame some of the delays that are being experienced on applicants submitting incomplete applications, stating: "A substantial proportion of the notifications we receive are incomplete. We process these incomplete submissions on longer timelines than complete notifications. To avoid delays in processing your notification once it has been allocated, we recommend that you provide all relevant information and documents in your initial submission". I have written previously on the FCA's approach to deciding whether a change in control application is complete and the issue with this.

The FCA goes on to say in its statement that "we will allocate your notification as soon as a case officer becomes available, and confirm whether it is complete as soon as possible after that point". This seems to be, when combined with the statement that it is taking about two months to allocate a case officer, a tactic admission that the FCA is not complying with the requirements under FSMA to acknowledge receipt of a completed change in control application within two working days of receipt. It seems likely that it is also not complying with the requirement under FSMA to, when it receives an incomplete section change in control application, inform the applicant as soon as reasonably practicable.

The FCA also says "We are recruiting additional case officers, and are making improvements as part of the FCA’s Transformation programme to reduce the time taken to allocate and determine cases." The FCA does not however provide any detail on when these case officers will be appointed or when they expect to be able to reduce delays with the change in control system.

We will continue to support clients to guide them through the change in control process as swiftly as possible despite the FCA delays. More information about our capability on regulatory transactions is available on our dedicated webpage here. 

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