Financial Services and Markets Bill - continued        House of Lords

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  PART XII
  CONTROL OVER AUTHORISED PERSONS
 
Notice of control
Obligation to notify the Authority.     169. - (1) If a step which a person proposes to take would 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,
  he 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) A person who is under the duty to notify the Authority imposed by subsection (1) must also give notice to the Authority on acquiring, or increasing, the control in question.
 
      (4) 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) is not a person authorised as a result of paragraph 1 of Schedule 5.
      (5) A notice under subsection (1) or (2) is referred to in this Part as "a notice of control".
 
 
Acquiring, increasing and reducing control
Acquiring control.     170. - (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 171 and 172, "associate", "shares" and "voting power" have the same meaning as in section 397.
 
Increasing control.     171. - (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.     172. - (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.     173. - (1) A notice of control must-
 
 
    (a) be given to the Authority in writing; and
 
    (b) include such information and be accompanied by such documents as the Authority may require.
      (2) The Authority may require the person giving a notice of control to provide such additional information or documents as it considers reasonable.
 
      (3) Different requirements may be imposed in different circumstances.
 
 
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Prepared 11 February 2000