Application sent successfully!

loader

Legal support order form on buying a foreign bank

user

Enter your name

user

Enter your E-mail

user

Enter your phone number

comment

Something went wrong, try resending after 5 seconds!

As per recently amended UK legislation, individuals seeking to purchase stakes or voting rights in British banking institutions (or a holding entity they are part of) must give advance notice to and receive permission from an authorized regulator which is called the PRA. Failing to follow legally prescribed procedure constitutes a criminal offense & is punishable by law. In its turn, PRA is required to agree the proposed change in control and granting authorization for purchasing a bank in Great Britain with FCA.

PRA has sixty business days to grant its approval for purchase of a banking institution in England. The said duration might get interrupted for a period of twenty business days if the regulatory body needs some additional information.

Who is Eligible to Buy a Banking Institution in Great Britain?

Except for UK, EU & UN sanctions imposed on certain individuals & states, there’s no limitations on foreign ownership of British banking institutions.

Banking institutions in Great Britain can be purchased by non-financial legal entities. Individuals holding substantial sway over a UK-based banking institution (e.g. senior managers & staff members of an umbrella company controlling the UK-based banking institution) are required to get approval of PRA .

Individuals supervising a UK-based banking institution are expected to proceed with executing their duties within their authority. That involves being collaborative with respective regulators, ensuring proper treatment of their customers & being compliant with regulations established by PRA & FCA.

What Responsibilities Individuals Purchasing UK-Based Banks are Required to Observe

Those considering purchasing a financial institution in Great Britain should keep in mind that legal entities/ individuals controlling it bear no responsibility for the liabilities a banking institution has accrued. 

Regulatory Permissions 

Pursuant to UK & EU legislation, purchasing a UK-based banking institution might require getting approval of respective regulators if it raises certain competition-related questions. Also, if the banking establishment's stocks are traded on stock exchanges, buying it will require compliance with corresponding listing rules.

Why Buyers May Not Be Permitted to Buy a Banking Institution in Great Britain

Regulators may refuse to grant permission for purchasing a functioning British banking establishment if the purchasers do not meet the following requirements:

  • their reputation & financial status do not meet regulators’ standards 
  • the buyer must ensure the banking institution’s compliance with relevant prudential requirements;
  • buyers must ensure effective control of the banking establishment by regulators;
  • buyers must provide convincing proof that their purchasing of the functioning banking institution in England is not done for the laundering of money or funding terrorism.

Documents Required for Purchasing a British Banking Institution

Purchasing a British banking institution requires buyers to fill out application forms available on the regulator’s official website. They are expected to provide indepth info about themselves & the final beneficiary, including diagrams, biographical data, business plans, earning reports, etc.. The purchaser’s business plan should comprise:

  • plan of strategic development
  • assessment of financial reports of a banking institution within a 3-year period
  • estimates of how the proposed acquisition will affect the banking institution 

The regulator may request that purchasers provide some additional info or documentation. They may also conduct an interview before granting a permit authorizing acquisition of a banking institution in Great Britain. 

Deadlines

PRA is provided sixty days to either grant or deny approval. Once it has granted its approval, purchasers are required to complete the purchasing of a banking institution in England within 365 days. 

Considering purchasing a banking institution in Great Britain? IQ Decision UK provide you with legal support at all stages of the purchasing process.