FCA Accelerates Progress On Consolidation Review

With the FCA's consolidation review proceeding at pace, boards of regulated firms as well as buyers and sellers need to review their regulatory capital structures, prior to filing change in control applications with the regulator or indeed undertaking any significant engagement with the FCA on their group structures.

In announcing its review, the FCA was clear in October 2024 that it would be prepared to exercise its broad power under section 143(J) and 55L(3) of Financial Services and Markets Act 2000 to require an overseas parent undertaking to be swapped for a UK parent company instead, with potentially material consequences for the size and scope of the regulatory consolidation group, where there are UK MiFID investment firms in the buyer and/or target group. The review should be considered not just when applying for authorisation and variation of permission, but also more generally when designing new group structures, seeking permission to apply the group