FCA change in control requirements can apply before a buyer acquires a majority stake. A Mexican or Indian fintech group plans to acquire a UK payments business or an EU-authorised crypto-asset service provider (CASP). It proposes a minority investment with veto rights, followed by majority ownership. Both stages need an approval sequence before relevant ownership or control rights take effect. (Financial Services and Markets Act 2000 (FSMA), ss 178, 181–182; Regulation (EU) 2023/1114 (MiCA), arts 3(1)(36), 83.)
- Identify the target's legal entity and regulatory status before choosing a filing route.
- Assess the minority investment, voting arrangements and vetoes separately from the later majority acquisition.
- Keep each regulated acquisition conditional on its required clearance, with buyer eligibility, funding and the target's continuing compliance evidenced before completion.
The outputs are a controller and approval map, an information request and responsibility schedule, share purchase agreement (SPA) provisions and a post-completion action list.
Who the engagement serves
The service is for founders, investors and corporate development teams acquiring an operating regulated business. It covers staged share purchases, holding-company investments and planned management or business-model changes.
Banks, asset purchases, token issuers and businesses with several regulatory permissions require an adjusted scope. A company registered solely for account information services also needs a different analysis from an authorised payment institution. The engagement identifies the relevant advisers and filing responsibilities for each jurisdiction. (FSMA, s 178(2A); Payment Services Regulations 2017 (PSRs), Sch 6 para 5; MiCA, arts 41, 60(10), 83.)
Establish the approval route
UK payments and e-money businesses
For a UK payment institution, the starting point is the PSRs. Schedule 6 paragraph 5 applies FSMA Part XII with modifications. For an electronic money institution (EMI), the corresponding provisions are regulation 62 and Schedule 3 paragraph 4 of the Electronic Money Regulations 2011 (EMRs). These routes involve pre-acquisition assessment and approval; describing them as notification alone can obscure the closing restriction.
Under the applied provisions, the initial shareholding or voting-power threshold is 10%. Significant influence can trigger the regime below that percentage. Further assessment arises on reaching the 20%, 30% or 50% bands, or becoming a parent undertaking. The review checks relevant holdings in the target and its parent undertakings, aggregation rules and any applicable exception. (FSMA, ss 178, 181–184, 191F, 422, as applied by the PSRs and EMRs.)
A business authorised directly under FSMA needs its own classification. Some non-Directive firms have a 20% threshold under the Controllers (Exemption) Order, alongside the significant-influence test. A bank acquisition involves the Prudential Regulation Authority. An FCA registration or reference number alone does not identify the correct route. (FSMA, s 178(2A); Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009, arts 2–4.)
EU-authorised CASPs
MiCA qualifying holdings require a separate analysis. A holding qualifies at 10% or more of capital or voting rights, or where it permits significant influence over management. Article 83 covers direct and indirect acquisitions, persons acting in concert, subsequent increases reaching or exceeding 20%, 30% or 50%, and acquisitions making the CASP a subsidiary. (MiCA, arts 3(1)(36), 83(1).)
The target's home Member State determines the competent authority and local filing arrangements. A financial institution providing crypto-asset services through Article 60 has a different route: Article 60(10) excludes the Article 83–84 acquisition procedure, leaving the relevant sectoral ownership rules to be checked. (MiCA, arts 59–60, 93.)
The approval map records each entity, proposed controller, stage, instrument, authority and clearance route. It also identifies later stages that the initial clearance does not cover.
Test the minority rights before signing
The review examines the share purchase agreement, shareholders' agreement, articles and side letters together. It traces direct and indirect ownership, voting agreements, board appointment rights, options and the dates when rights become effective.
A veto over strategy or the business plan can support a significant-influence finding. Ordinary investor protections need analysis in their actual setting; neither every veto nor every agreement between shareholders establishes control. A future option must be distinguished from voting or management rights exercisable now. (FSMA, ss 178(2), 181(2)(c), 422; FCA FG24/5, paras 2.9–2.25 and Annex 2; MiCA, arts 3(1)(36), 83; Joint EBA/ESMA Guidelines ESMA75-453128700-10, qualifying-holdings para 15.)
Settle the rights analysis before signing. If signing itself gives the buyer relevant control, postponing the share transfer will not solve the approval problem. Interim covenants should preserve the business while leaving operating decisions with its existing management until control can lawfully pass. (FCA FG24/5, Annex 2, “Conditional agreements”.)
Assemble the evidence and test the target
The regulatory information request assigns responsibility for:
- Ownership charts, incorporation records and the identities of direct and indirect controllers and beneficial owners.
- Financial statements, acquisition finance, source-of-funds evidence and the resources available to support the target.
- Reputation disclosures, relevant proceedings and regulatory history, management experience and required criminal-record checks.
- The proposed business plan, capital projections, management structure and changes to customers, services or outsourcing.
- Overseas regulatory records, home-country permissions and translations required for the selected filing.
A regulated overseas buyer may need supervisory documentation that an ordinary technology company cannot supply. MiCA's dedicated information requirements also address financing arrangements and relevant crypto-asset funding trails. (FSMA, ss 179, 186; FCA FG24/5, chs 3–4; Commission Delegated Regulation (EU) 2025/414, arts 1–11.)
Target diligence checks the actual permissions and restrictions, supervisory correspondence, enforcement history, customer liabilities, capital and safeguarding or client-asset arrangements. It also examines essential banking contracts, outsourcing and whether the management team can operate the proposed business. These findings determine what requires repair before closing and what needs contractual protection. (PSRs, regs 6, 22–25, 37; EMRs, regs 6, 19–21, 26, 37; FCA CASS 15; MiCA, arts 67–70, 73.)
Broader token, product and operational investigations can be scoped through Web3 Legal Due Diligence. Those findings inform the approval and completion decisions.
Put the regulatory sequence into the agreement
The SPA workstream produces regulatory cooperation provisions and a closing-condition checklist. Each condition should identify the relevant authority, required evidence, permitted approval conditions and responsibility for satisfying it.
The proposed terms address information requests, changes to ownership or funding, seller cooperation and the treatment of an adverse regulatory decision. The long-stop date should allow for preparation, assessment interruptions and separate approvals. Any extension and termination rights need express agreement.
Known liabilities may justify a price adjustment, escrow or specific indemnity. A safeguarding deficit still requires the legally required repair; a lower purchase price does not replenish customer funds. Essential bank or service-provider consents require separate contractual evidence. (PSRs, reg 23; EMRs, regs 20–22; FCA CASS 15.8.50R–15.8.58R.)
The closing checklist verifies satisfied conditions and consistency with the assessed ownership, funding and business plan. It must address any statutory deemed-approval route, using the correctly adjusted deadline and applicable conditions. (FSMA, s 189(6); MiCA, art 83(8)–(9).)
Resolve the buyer's separate obligations
For an Indian-resident buyer covered by the overseas-investment regime, acquiring equity in an unlisted foreign entity is overseas direct investment even at a minority percentage. Financial-services eligibility, the proposed activity's treatment under Indian law, funding and reporting through the designated authorised dealer bank need review. A MiCA authorisation does not itself establish Indian eligibility. (Foreign Exchange Management (Overseas Investment) Rules 2022, rr 2(1)(q), 9, 11 and Sch I para 2 and Explanation; Overseas Investment Regulations 2022, regs 9–10.)
For a Mexican buyer, the investing entity's status matters. A credit institution needs authorisation from the banking supervisor (CNBV) for the foreign financial equity investment covered by article 89. An authorised financial-technology institution must establish that its own permitted activities support the proposed investment. A regulated financial holding company has a separate finance ministry (SHCP) authorisation route. An ordinary parent needs its own capacity and funding analysis. (Ley de Instituciones de Crédito, art 89; Ley para Regular las Agrupaciones Financieras, art 81(VI); Ley para Regular las Instituciones de Tecnología Financiera, arts 19, 25.)
Our analysis of a Mexican acquisition of a Lithuanian EMI examines a different target route. The Lithuanian EMI rules it discusses should not be imported into a UK payments or EU CASP transaction.
Competition, foreign-investment screening and any applicable EU foreign-subsidy review remain separate specialist workstreams. Their thresholds and control tests need their own assessment. (Enterprise Act 2002, ss 23, 26; National Security and Investment Act 2021, ss 6, 8, 13; Regulations (EC) No 139/2004, arts 1, 3–7; (EU) 2019/452, arts 1–3; (EU) 2022/2560, arts 20–24.)
Plan completion and the operating changes
The final action list allocates completion notifications, permitted management appointments, capital commitments and compliance with approval conditions. It separates share completion from changes to permissions, outsourcing and customer services. The regulated target retains its responsibilities after the purchase. (PSRs, regs 8, 25, 37; EMRs, regs 8, 26–27, 37; MiCA, arts 59(4), (6), (8), 65, 69, 73.)
Where the intended payments business requires a different authorisation, Payment & E-Money Licensing provides the companion scope.
Information needed to scope the work
Provide the buyer and target names, incorporation countries, regulatory status and group charts. Include the proposed percentages at each stage, voting and veto rights, draft transaction documents, funding outline, intended operating changes and target dates. For an EU CASP, identify its home Member State and authorisation route. Start with a transaction summary; agree the document-sharing process before sending sensitive records.
Buyer questions
Can the minority investment complete first?
Only after its own control and approval requirements are resolved. A smaller percentage does not remove the significant-influence or aggregation tests. The later majority stage needs a fresh check against the scope and validity of the earlier clearance. (FSMA, ss 181–182, 191; MiCA, art 83.)
How long does change of control approval take?
The UK statutory period is 60 working days from acknowledgement of a completed notification. MiCA provides 60 working days from written acknowledgement under Article 83. Information requests can interrupt these periods. Preparation, home-country approvals and contractual dependencies must be scheduled separately. (FSMA, ss 180, 189–190; MiCA, art 83(3)–(6).)
Does buying the company give the parent its licence?
The authorisation belongs to the regulated provider. The parent needs a separate assessment if it will itself perform regulated activities. Proposed services and territories must fit the target's permissions and applicable cross-border procedures. (PSRs, regs 6, 8; EMRs, regs 6, 8; MiCA, arts 59(1), (6), (8), 65.)
What if the target cannot support the planned business?
The acquisition should remain conditional on the required permissions and remediation. If those cannot be obtained on acceptable terms, the buyer should consider another target, a new authorisation or a permitted arrangement with an authorised provider. The service scope should identify that decision before the buyer becomes unconditionally committed.
Scope a regulated fintech acquisition
Contact Licentium with the proposed target, buyer jurisdiction and investment stages. The scoping discussion establishes the approval workstream, documents and advisers needed before signing or completion.