Financial Services and Markets Bill - continued        House of Commons

back to previous text
 
  PART XI
  CONTROL OVER AUTHORISED PERSONS
 
Notice of control
Obligation to notify the Authority.     148. - (1) A person who proposes to take any step which will result in his acquiring-
 
 
    (a) control over a UK authorised person,
 
    (b) an additional kind of control over a UK authorised person, or
 
    (c) an increase in a relevant kind of control which he already has over a UK authorised person,

must notify the Authority of his proposal.
      (2) A person who, without himself taking any such step, acquires any such control or additional or increased control must notify the Authority before the end of the period of fourteen days beginning with the day on which he first becomes aware that he has acquired it.
 
      (3) In this Part "UK authorised person" means an authorised person who-
 
 
    (a) is a body incorporated in, or an unincorporated association formed under the law of, any part of the United Kingdom; and
 
    (b) does not qualify for authorisation under Schedule 5.
      (4) A notice under this section is referred to in this Part as "a notice of control".
 
 
Acquiring, increasing and reducing control
Acquiring control.     149. - (1) For the purposes of this Part, a person ("the acquirer") acquires control over a UK authorised person ("A") on first falling within any of the cases in subsection (2).
 
      (2) The cases are where the acquirer-
 
 
    (a) holds 10% or more of the shares in A;
 
    (b) is able to exercise significant influence over the management of A by virtue of his shareholding in A;
 
    (c) holds 10% or more of the shares in a parent undertaking ("P") of A;
 
    (d) is able to exercise significant influence over the management of P by virtue of his shareholding in P;
 
    (e) is entitled to exercise, or control the exercise of, 10% or more of the voting power in A;
 
    (f) is able to exercise significant influence over the management of A by virtue of his voting power in A;
 
    (g) is entitled to exercise, or control the exercise of, 10% or more of the voting power in P; or
 
    (h) is able to exercise significant influence over the management of P by virtue of his voting power in P.
      (3) In subsection (2) "the acquirer" means-
 
 
    (a) the acquirer;
 
    (b) any of the acquirer's associates; or
 
    (c) the acquirer and any of his associates.
      (4) For the purposes of this Part, each of the following is to be regarded as a kind of control-
 
 
    (a) control arising as a result of the holding of shares in A;
 
    (b) control arising as a result of the holding of shares in P;
 
    (c) control arising as a result of the entitlement to exercise, or control the exercise of, voting power in A;
 
    (d) control arising as a result of the entitlement to exercise, or control the exercise of, voting power in P.
      (5) For the purposes of this section and sections 150 and 151, "associate", "shares" and "voting power" have the same meaning as in section 356.
 
Increasing control.     150. - (1) For the purposes of this Part, a controller of a person ("A") who is a UK authorised person increases his control over A if-
 
 
    (a) the percentage of shares held by the controller in A increases by any of the steps mentioned in subsection (2);
 
    (b) the percentage of shares held by the controller in a parent undertaking ("P") of A increases by any of the steps mentioned in subsection (2);
 
    (c) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in A increases by any of the steps mentioned in subsection (2);
 
    (d) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in P increases by any of the steps mentioned in subsection (2); or
 
    (e) the controller becomes a parent undertaking of A.
      (2) The steps are-
 
 
    (a) from below 10% to 10% or more but less than 20%;
 
    (b) from below 20% to 20% or more but less than 33%;
 
    (c) from below 33% to 33% or more but less than 50%;
 
    (d) from below 50% to 50% or more.
      (3) In paragraphs (a) to (d) of subsection (1) "the controller" means-
 
 
    (a) the controller;
 
    (b) any of the controller's associates; or
 
    (c) the controller and any of his associates.
      (4) In the rest of this Part "acquiring control" or "having control" includes-
 
 
    (a) acquiring or having an additional kind of control; or
 
    (b) acquiring an increase in a relevant kind of control, or having increased control of a relevant kind.
Reducing control.     151. - (1) For the purposes of this Part, a controller of a person ("A") who is a UK authorised person reduces his control over A if-
 
 
    (a) the percentage of shares held by the controller in A decreases by any of the steps mentioned in subsection (2),
 
    (b) the percentage of shares held by the controller in a parent undertaking ("P") of A decreases by any of the steps mentioned in subsection (2),
 
    (c) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in A decreases by any of the steps mentioned in subsection (2),
 
    (d) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in P decreases by any of the steps mentioned in subsection (2), or
 
    (e) the controller ceases to be a parent undertaking of A,

unless the controller ceases to have the kind of control concerned over A as a result.
      (2) The steps are-
 
 
    (a) from 50% or more to 33% or more but less than 50%;
 
    (b) from 33% or more to 20% or more but less than 33%;
 
    (c) from 20% or more to 10% or more but less than 20%;
 
    (d) from 10% or more to less than 10%.
      (3) In paragraphs (a) to (d) of subsection (1) "the controller" means-
 
 
    (a) the controller;
 
    (b) any of the controller's associates; or
 
    (c) the controller and any of his associates.
 
Acquiring or increasing control: procedure
Notification.     152. - (1) A notice of control must-
 
 
    (a) be given to the Authority in writing; and
 
    (b) include such information as the Authority may direct in writing.
      (2) The Authority may by a direction in writing require the person giving a notice of control to provide such additional information or documents as it may reasonably require.
 
Duty of Authority in relation to notice of control.     153. - (1) The Authority must, before the end of the period of three months beginning with the date on which it receives a completed notice of control ("the period for consideration"), determine whether-
 
 
    (a) to approve of the person concerned having the control to which the notice relates; or
 
    (b) to serve a warning notice.
      (2) Before doing so, the Authority must comply with such requirements as to consultation with competent authorities outside the United Kingdom as may be prescribed.
 
      (3) If the Authority gives a direction under section 152(2), the period for consideration stops running on the day on which the direction is given but starts running again-
 
 
    (a) on the day on which the required information is received by the Authority; or
 
    (b) if the information is not provided on a single day, on the last of the days on which it is received by the Authority.
      (4) In subsection (3) "information" includes documents.
 
Approval of acquisition of control.     154. - (1) If the Authority decides to approve of the person concerned having the control to which the notice relates it must notify that person of its approval in writing without delay.
 
      (2) If the Authority fails to comply with subsection (1) of section 153 it is to be treated as having given its approval and notified the person concerned at the end of the period fixed by that subsection.
 
      (3) The Authority's approval remains effective only if the person to whom it relates acquires the control in question-
 
 
    (a) before the end of such period as may be specified in the notice; or
 
    (b) if no period is specified, before the end of the period of one year beginning with the date-
 
      (i) of the notice of approval;
 
      (ii) on which the Authority is treated as having given approval under subsection (2); or
 
      (iii) of a decision on a reference to the Tribunal which results in the person concerned receiving approval.
 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1999
Prepared 18 November 1999