Change in control over a payment institution (PI) and electronic money institution (EMI)

The revised Payment Services Regulations 2017 (PSRs 2017) introduced new requirements for a change in qualifying holding or change in control of PIs. There are no changes to the change in control process for EMIs.

How PIs will be affected

The new requirements will apply from 13 January 2018 to the PIs which are authorised or registered under PSD2. Those firms which have not yet been re-authorised or re-registered under PSD2 will continue to follow the process set out in the Payment Services Regulations 2009. The transition period will expire on 12 July 2018 for authorised payment institutions and 12 January 2019 for small payment institutions.

Our approach to changes in control over PIs will be the same as our approach to changes in control over EMIs and firms authorised under Financial Services and Markets Act (FSMA). Chapter 11 of SUP (in particular, SUP 11.3 and SUP 11 Annex 6G) provides guidance on the change in control provisions of FSMA.

In accordance with paragraph 4 of Schedule 3 to the Electronic Money Regulations and paragraph 5 of Schedule 6 of the Payment Services Regulations 2017, the change in control provisions of FSMA (Part 12) apply to a person who decides to acquire, increase or reduce control or to cease to have control over an EMI or a PI.

What is new for change in control involving PIs

  • A notice giver will be a proposed acquirer who will submit change in control notifications.
  • A change in control resulting in acquisition or increase of control must be approved by the FCA before it takes effect.
  • Proceeding with a change in control before obtaining approval from the FCA is a criminal offence.
  • There are five control bands (10% or more but less than 20%, 20% or more but less than 30%, 30% or more but less than 50%, 50% or more, or significant influence).
  • Our assessment period may take up to 60 working days.
  • A change in control proposal can be approved, approved with conditions, or refused.

Change in control over PIs or EMIs

​​​​Under the Payment Services Regulations (PSRs) 2017 and the Electronic Money Regulations 2011, if you are proposing to acquire or increase a qualifying holding, or control, in a PI or EMI, you must notify and obtain approval in advance from the FCA, and, in some circumstances, from the PRA. You must notify us in writing.

A qualifying holding or control is 10% or more of the capital or voting rights in a regulated firm or its parent undertaking; or which makes it possible to exercise a significant influence over the management of the regulated firm.  A person or entity with a qualifying holding is called a controller.

Changes in control occur when a relevant threshold is crossed; these thresholds are 10%, 20%, 30% and 50%, or significant influence. Decreases in qualifying holdings must also be notified by outgoing controllers.

Tell us about the change

Apply to acquire or increase control

The person acquiring or increasing their qualifying holding (control) must obtain approval in advance.

You need to submit completed controller notification forms using the form that applies to you:

We need supporting documents on the proposed controllers and firm after the change in control.

Email your completed form to: [email protected], unless it contains confidential or sensitive material, in which case send it by secure post to:

Change in Control Team
Retail Department, Authorisations Division
Financial Conduct Authority
25 The North Colonnade
London E14 5HS

Notify to reduce or cease a control

There is no form to notify a reduction or disposal of control. A notice given to us by a person who is reducing or ceasing to have control over a PI should be in writing and provide details of the extent of control (if any) which the controller will have following the change in control. Email [email protected] and tell us:

  • the existing and proposed shareholding in the EMI or PI
  • the name of the person your control will go to

Dual-regulated firms: apply to change control

If a firm in which you wish to acquire, or increase, control in is regulated by the FCA and the Prudential Regulation Authority (PRA), you need permission from both before you can proceed with a change a control.

The ‘regulator section’ of the firm register lists the regulator(s).

Email the form to: [email protected], unless it contains confidential or sensitive material - in which case send it by secure post to:

Assessment and Monitoring Team
Prudential Regulation Authority
20 Moorgate, London, EC2R 6DA

How long it takes

Our approval is required before any acquisition of or increase in control can take place. We have 60 working days (which can be interrupted and put on hold for up to another 30 working days) to decide whether to approve, approve with conditions or object to the proposed changes in control.

Penalties

Acquiring or increasing control in a PI or EMI without approval may be a criminal offence.

Further information

See more information in Chapter 4 of Payment Services and Electronic Money – Our Approach.