A person who decides to acquire or increase control over a UK authorised person must give the F10appropriate regulator notice in writing before making the acquisition.

For the purposes of calculations relating to this section, the holding of shares or voting power by a person (“A1”) includes any shares or voting power held by another (“A2”) if A1 and A2 are acting in concert.

This section does not apply if the only regulated activity for which the UK authorised person has a Part 4A permission is the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

In this Part, a notice given under this section is a “section 178 notice” and a person giving notice is a “section 178 notice-giver”.

 A section 178 notice must be in such form, include such information and be accompanied by such documents as the F10appropriate regulator may reasonably require.

F20Each regulator must publish a list of its requirements as to the form, information and accompanying documents for a section 178 notice.

The F10appropriate regulator may impose different requirements for different cases and may vary or waive requirements in particular cases.

 The F10appropriate regulator must acknowledge receipt of a completed section 178 notice in writing before the end of the second working day following receipt.

If the F10appropriate regulator receives an incomplete section 178 notice it must inform the section 178 notice-giver as soon as reasonably practicable.

 For the purposes of this Part, a person (“A”) acquires control over a UK authorised person (“B”) if any of the cases in subsection (2) begin to apply.

 For the purposes of sections 181 to 183, shares and voting power that a person holds in a UK authorised person (“B”) or in a parent undertaking of B (“P”) are disregarded in the following circumstances.

Shares held only for the purposes of clearing and settling within a short settlement cycle are disregarded.

Shares held by a custodian or its nominee in a custodian capacity are disregarded, provided that the custodian or nominee is only able to exercise voting power represented by the shares in accordance with instructions given in writing.

Where a management company (as defined in F1Article 2.1(b) of the UCITS directive) and its parent undertaking both hold shares or voting power, each may disregard holdings of the other, provided that each exercises its voting power independently of the other.

Shares acquired for stabilisation purposes in accordance with F49the market abuse regulation and the Commission Delegated Regulation (EU) No. 1052/2016 of 8 March 2016 supplementing Regulation (EU) No. 596/2014 of the European Parliament and the Council with regard to the regulatory technical standards for conditions applicable to buy-back programmes and stabilisation measures are disregarded, provided that the voting power attached to those shares is not exercised or otherwise used to intervene in the management of B or P.

For the purposes of this section, an undertaking is a controlled undertaking of the parent undertaking if it is controlled by the parent undertaking; and for this purpose the question of whether one undertaking controls another is to be determined in accordance with section 89J(4) and (5).

 The F10appropriate regulator may impose conditions on its approval of an acquisition.

The F10appropriate regulator may not impose conditions requiring a particular level of holding to be acquired.

The F10appropriate regulator may vary or cancel the conditions.

The PRA must consult the FCA before acting under section 185.

The FCA may make representations to the PRA in relation to any of the matters set out in sections 185(2) and 186.

Before giving a direction under subsection (3), the FCA must notify the PRA of its proposal to do so.

Where the PRA notifies the FCA that it F40is required by section 189(1ZB) to act in a timely manner, the FCA may take action under subsection (2), (3) or (4) after the time it receives that notification only if that action is taken as soon as reasonably practicable after that time.

If the PRA acts under section 185(1)(b), it must indicate to the section 178 notice-giver any representations or directions received from the FCA.

Directions given by the FCA under this section are subject to any directions given to the FCA under section 3I or 3J.

The PRA may make representations to the FCA in relation to any of the matters set out in sections 185(2) and 186.

If the PRA considers that on the basis of relevant matters there are reasonable grounds to object to the acquisition, the PRA may direct the FCA not to approve the acquisition unless it does so subject to conditions specified in the direction (with or without other conditions).

If the FCA acts under section 185(1)(b), it must indicate to the section 178 notice-giver any representations or directions received from the PRA.

 The F10appropriate regulator must consult any appropriate home state regulator before making a determination under section 185 and, in doing so, must comply with such requirements as to consultation as may be prescribed.

Where the F10appropriate regulator makes a determination under section 185, it must indicate any views or reservations received from any home state regulator it consults in accordance with subsection (1).

The F10appropriate regulator must cooperate with any equivalent consultation F25in relation to a UK authorised person by the home state regulator of an EEA firm.

 The F10appropriate regulator must act under section 185 within a period of 60 working days beginning with the day on which the F10appropriate regulator acknowledges receipt of the section 178 notice (“the assessment period”).

F42Where the appropriate regulator is the FCA and the section 178 notice relates to an acquisition or increase of control over a credit institution, investment firm or banking group company, the Bank of England, acting in the exercise of its functions under sections 6A to 6C of the Banking Act 2009 or under the special resolution regime under Part 1 of that Act, may direct the appropriate regulator to act under this Part in a timely manner, and to shorten the assessment period so far as reasonably practicable.

In F43 subsections (1A) and (1ZB) —

• F44...

• “banking group company” has the meaning given in section 81D of F45the Banking Act 2009.

The assessment period may be interrupted, no more than once, in accordance with section 190.

If the F10appropriate regulator decides to approve an acquisition subject to conditions or to object to an acquisition it must give the section 178 notice-giver a decision notice.

Following receipt of a decision notice under this section, the section 178 notice-giver may refer the F10appropriate regulator's decision to the Tribunal.

 The F10appropriate regulator may, no later than the 50th working day of the assessment period, in writing ask the section 178 notice-giver to provide any further information necessary to complete its assessment.

But where a direction has been given by the Bank of England under section 189(1A) F46or section 189(1ZB) applies, the appropriate regulator must, as soon as reasonably practicable, ask the section 178 notice-giver to provide any further information necessary to complete its assessment.

On the first occasion that the F10appropriate regulator asks for further information, the assessment period is interrupted from the date of the request until the date the F10appropriate regulator receives the requested information (“the interruption period”).

But the interruption period may not exceed 20 working days, unless subsection (4) applies.

The F10appropriate regulator may make further requests for information (but a further request does not result in a further interruption of the assessment period).

The F10appropriate regulator must acknowledge in writing receipt of further information before the end of the second working day following receipt.

The transfer of shares or voting takes effect in accordance with the terms of the relevant transfer instrument, but the right of the person who acquires shares under that instrument (“the acquirer”) to exercise the voting power represented by those shares is suspended.

During the suspension, the voting power represented by the shares in question may be exercised by the Bank (and only by the Bank).

If the appropriate regulator issues a decision notice under section 189(7) objecting to the acquisition, the Bank may direct the acquirer to sell the shares within a period specified by the Bank in the direction (“the sale period”).

In determining the sale period, the Bank must take account of prevailing market conditions.

In this section a “relevant transfer instrument” means an instrument made by the Bank acting in the exercise of its functions under sections 6A to 6C of the Banking Act 2009 or under the special resolution regime under Part 1 of that Act, which transfers, or has the effect of transferring, shares issued by, or voting power in, the credit institution, investment firm or banking group company.

 Approval of an acquisition (whether granted unconditionally or subject to conditions) is effective for such period as the F10appropriate regulator may specify in writing.

Where the F10appropriate regulator has specified a period under subsection (1), it may extend the period.

 The F10appropriate regulator may object to a person's control over a UK authorised person in any of the circumstances specified in subsection (2).

If the F10appropriate regulator proposes to object to a person's control over a UK authorised person, it must give that person a warning notice.

Where the appropriate regulator is the PRA, it must consult the FCA before giving a warning notice under this section.

The F10appropriate regulator must consult any appropriate home state regulator before giving a warning notice under this section and, in doing so, must comply with such requirements as to consultation as may be prescribed.

If the F10appropriate regulator decides to object to a person's control over a UK authorised person, it must give that person a decision notice.

A person to whom the F10appropriate regulator gives a decision notice under this section may refer the matter to the Tribunal.

 The F10appropriate regulator may give notice in writing (a “restriction notice”) to a person in the following circumstances.

Where the appropriate regulator is the PRA, it must consult the FCA before giving a restriction notice under this section.

Subsection (3)(a) and (b) does not apply where the voting power represented by the shares in question is suspended under section 190A(2).

A restriction notice does not extinguish rights which would be enjoyable but for the notice.

A person to whom the F10appropriate regulator gives a restriction notice may refer the matter to the Tribunal.

 The court may, on the application of the F10appropriate regulator, order the sale of shares or the disposition of voting power in the following circumstances.

Where the appropriate regulator is the PRA, it must consult the FCA before making an application to the court under this section.

Where the court makes an order under this section, it must take into account the level of holding that the person would have been entitled to acquire, or to continue to hold, without contravening the final notice.

If shares are sold or voting power disposed of in pursuance of an order under this section, any proceeds, less the costs of the sale or disposition, must be paid into court for the benefit of the persons beneficially interested in them; and any such person may apply to the court for payment of a whole or part of the proceeds.

The jurisdiction conferred by this section may be exercised by the High Court and the Court of Session.

The appropriate regulator must obtain the consent of the Bank of England before making an application under this section in relation to shares if the Bank has the power to direct the sale of those shares under section 190A(4).

The appropriate regulator may not make an application under this section in relation to shares if the Bank of England has given a direction for the sale of those shares under section 190A(4).

 A person who decides to reduce or cease to have control over a UK authorised person must give the F10appropriate regulator notice in writing before making the disposition.

The PRA must give the FCA a copy of any notice it receives under this section.

For the purposes of calculations relating to this section, the holding of shares or voting power by a person (“A1”) includes any shares or voting power held by another (“A2”) if A1 and A2 are acting in concert.

 A notice under section 191D must be in such form, include such information and be accompanied by such documents as the F10appropriate regulator may reasonably require.

F17Each regulator must publish a list of its requirements as to the form, information and accompanying documents for a notice under section 191D.

The F10appropriate regulator may impose different requirements for different cases and may vary or waive requirements in particular cases.

 A person who fails to comply with an obligation to notify the F10appropriate regulator under section 178(1) or 191D(1) is guilty of an offence.

A person who gives notice to the F10appropriate regulator under section 178(1) and makes the acquisition to which the notice relates before the expiry date of the assessment period is guilty of an offence unless the F10appropriate regulator has approved the acquisition or given a warning notice under section 189(4)(b)(i) F38or section 190A applies.

A person who contravenes an interim condition in a warning notice given under section 189(4)(b)(i) or a condition in a decision notice given under section 189(7) or a final notice which confirms a decision notice under that section is guilty of an offence.

A person who makes an acquisition in contravention of a warning notice given under section 189(4)(b)(ii) or a decision notice given under section 189(7) or a final notice which confirms a decision notice under that section is guilty of an offence.

A person who fails to comply with a direction given by the Bank of England under section 190A(4) is guilty of an offence.

A person who makes an acquisition after the F10appropriate regulator's approval for the acquisition has ceased to be effective by virtue of section 191 is guilty of an offence.

A person who provides information to the F10appropriate regulator which is false in a material particular is guilty of an offence.

A person who breaches a direction contained in a restriction notice given under section 191B is guilty of an offence.

 In this Part—

• “acquisition” means the acquisition of control or of an increase in control over a UK authorised person;

• F18“the appropriate regulator” is to be read in accordance with section 178(2A);

• “credit institution” means—

  1. a

     a credit institution authorised under the F26capital requirements directive; or

  2. b

     an institution which would satisfy the requirements for authorisation as a credit institution under that directive if it had its registered office (or if it does not have a registered office, its head office) in an EEA State;

• “shares” has the same meaning as in section 422;

• “UK authorised person” means an authorised person who—

  1. a

     is a body incorporated in, or an unincorporated association formed under the law of, any part of the United Kingdom; and

  2. b

     is not a person authorised as a result of paragraph 1 of Schedule 5; and

• “voting power” has the same meaning as in section 422.