But for FCA-regulated firms, significant changes to ownership or control are more than commercial decisions. They can fundamentally alter how a business is governed, managed and supervised.

This is why the FCA requires certain changes to be approved before they take place.

A Change in Control isn't simply an administrative process.

It's about ensuring that the business continues to be operated by people who are suitable, competent and committed to meeting regulatory standards.

When Might a Change in Control Be Required?

Every transaction is different, but firms should consider whether FCA approval may be required where there are significant changes to the ownership or control of the business.

This may include:

• Acquiring or disposing of shares that reach or exceed regulatory control thresholds.
• Changes to voting rights or the ability to influence business decisions.
• Internal group restructures that alter control within the organisation.
• The appointment of new parent companies or holding structures.
• Mergers and acquisitions.
• Management buy-outs or external investment.
• Any arrangement that results in another person or organisation gaining significant influence over the firm.

A Change in Control isn't always obvious.

Sometimes the legal ownership changes very little, but the practical ability to direct the business changes significantly.

Understanding the substance of the transaction is just as important as understanding the structure.

Growth Should Never Come at the Expense of Governance

Commercial opportunities often move quickly.

• Investment becomes available.
• Acquisition targets emerge.
• Businesses restructure to improve efficiency.

While these decisions are commercially important, they should never overlook the regulatory implications.

Good governance means considering regulatory requirements at the beginning of a transaction, not immediately before completion.

Bringing compliance into strategic discussions early helps identify potential regulatory approvals, realistic timescales and any risks that could delay or prevent a transaction.

The Importance of Regulatory Due Diligence

Regulatory due diligence should be given the same importance as financial and legal due diligence. A profitable acquisition can still become a poor investment if the governance framework, culture or regulatory history is fundamentally weak

• Financial due diligence tells you whether a business is profitable.
• Legal due diligence tells you whether contracts and liabilities are understood.
• Regulatory due diligence tells you whether you are acquiring risk you didn't know existed.

Before any acquisition, merger or investment, businesses should understand:

• The firm's regulatory history.
• Previous FCA interactions.
• Consumer Duty governance.
• Complaints trends.
• Financial crime controls.
• Operational resilience.
• Governance arrangements.
• Senior Manager responsibilities.
• Ongoing remediation programmes.
• Open regulatory issues or investigations.

Without regulatory due diligence, buyers may inherit weaknesses that are expensive, time-consuming and damaging to resolve.

Good due diligence isn't simply about identifying problems.

It's about understanding whether the governance of the business is capable of supporting future growth.

Plan Before You Notify

One of the most common mistakes businesses make is treating a Change in Control application as the beginning of the project.

In reality, it should be one of the final stages.

Long before notifying the FCA, firms should understand:

• Why the change is taking place.
• How governance will be affected.
• Whether reporting lines will change.
• How responsibilities will be allocated.
• Whether the business remains capable of delivering good customer outcomes.
• What risks the transaction introduces and how they will be managed.

A well-prepared application demonstrates that these questions have already been considered.

Good Governance Makes Change Easier

The strongest businesses rarely struggle with regulatory change because governance is already embedded.

• Board oversight exists.
• Management Information is available.
• Consumer Duty is understood.
• Risks are actively managed.
• Policies reflect how the business actually operates.

When governance is already part of the organisation, a Change in Control becomes an opportunity to demonstrate the strength of the business rather than a scramble to prepare for regulatory scrutiny.

Making Regulation Make Sense

A Change in Control is not simply about notifying the FCA that ownership has changed. It's about demonstrating that the business will continue to be well governed, financially sound and capable of delivering good customer outcomes under its new structure. Businesses that plan early, carry out meaningful regulatory due diligence and embed governance before change takes place are far better placed to achieve successful outcomes—for themselves, their customers and the regulator.