REC 4.2C Control over a UK RIE

Section 301A(1) of chapter 1A of Part XVIII of the Act places an obligation on a person who decides to acquire or increase control (see sections 301D and 301E of the Act) over a UK RIE to notify the FCA, before making the acquisition. Furthermore, those persons are required to obtain the FCA's approval before acquiring control or increasing the level of control held.

The FCA will approve an acquisition or an increase in control if it is satisfied that the acquisition by the person seeking approval does not pose a threat to the sound and prudent management of any financial market operated by the UK RIE (see section 301F(4) of the Act). The reference to any financial market is to be read as including a reference to any auction platform as a result of the RAP regulations.

If a proposed acquirer has complied with the obligation to notify, the procedure the FCA will follow if it approves or does not approve of that person acquiring or increasing control is set out in sections 301F and 301G of the Act.

The FCA's internal arrangements provide for any decisions to refuse to approve an acquisition or object to an existing control to be taken at an appropriately senior level.

If the FCA refuses to approve an acquisition or objects to an existing control, the person concerned may refer the matter to the Tribunal.

The powers the FCA can exercise in the event that a person acquires or continues to exercise control notwithstanding the FCA's refusal to approve the acquisition of control or the FCA's objection to the exercise of control are set out in sections 301J and 301K of the Act.

The offences for which a person who fails to comply with the obligations set out in Chapter 1A of Part XVIII of the Act is liable are set out in section 301L of the Act.