CP23/23: Prudential assessment of acquisitions and increases in control

Read CP23/25[1] 

Why we are consulting

We, alongside the Prudential Regulation Authority[2] (PRA), are consulting on proposals to replace the EU guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (3L3 Guidelines) with a new PRA supervisory statement (SS) and FCA guidance. 

Who is this for

The CP is relevant to:

• all PRA and FCA authorised firms and all persons to which Part XII of FSMA applies 
• firms seeking to apply for PRA authorisation in identifying who their controllers are

Next steps

This consultation has now closed. We will publish feedback on responses and issue any finalised guidance in due course.

Background

The European Banking Authority[3], the European Insurance and Occupational Pensions Authority[4] and the European Securities and Markets Authority[5] jointly reviewed and updated the 3L3 Guidelines in 2017. 

These guidelines established an EU-wide common understanding of the five assessment criteria to be applied by the competent authorities in the assessment process and what should be taken into account under each criteria. 

The 3L3 Guidelines are listed within the Bank and PRA’s interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU[6].

We have set out our approach to non-legislative material produced by the EU in our non-handbook guidance Brexit: our approach to EU non-legislative materials[7]. 

Specific reference to the 3L3 Guidelines remains in the FCA Handbook and on our website. Therefore, the 3L3 Guidelines have continued to be relevant to UK Change in Control (CIC) transactions since EU withdrawal.