On 14 July 2021, the House of Commons’ Treasury Committee published a letter it had received from Sam Woods (Deputy Governor and CEO, PRA) which discussed the conditions for assessing a proposed change in control of a regulated firm. During an appearance before the Treasury Committee Mr Woods was asked to set out his thoughts on possible enhancements to the conditions for assessing a proposed change in control under the Financial Services and Markets Act 2000.
The letter notes that before the Acquisitions Directive, the regulator could object to an acquisition unless it was satisfied that the relevant conditions were met. Now, the regulator may only object to a complete application if there are reasonable grounds for doing so based on the six criteria. This shifted the burden of proof. The PRA is raising with HM Treasury the possibility of reverting the burden to the original approach, to allow the regulator to object unless it is satisfied it is appropriate for an acquisition to take place in the light of the relevant criteria. Doing so would strengthen the hand of the regulator where the position is unclear and be conducive in practice to an even more robust approach to the review of acquisitions.