Timely notification
Q. We are considering the acquisition of a local firm who are about half our size. Am I right in believing that the FSA might take an interest in this?
You would have been authorised on the basis of the information that you supplied to the Financial Services Authority at that time. Once you become an authorised firm, a proposed acquisition becomes a notifiable event. This means that, at an early stage in the negotiation, you must notify the FSA of your intention.
You do not say if your firm has an income in excess of £1m. If it does, you would have submitted a business plan as part of Annex 1 with your application. If this is the case, you may have indicated that it was your intention to grow the firm by acquisition. Even if that was the case, the proposed transaction is still a notifiable one.
The regulator will be interested to learn of your plans to absorb the acquisition, how you will approach the management and supervision, particularly if the separate premises are to be retained. You will also need to demonstrate that you will be able to remain within the solvency rules as a result of making this acquisition.
Apart from notifying this as a material change to the business that the FSA authorised, also bear in mind that, by timely notification, you are also fulfilling the high-level principle of dealing with the regulator in an open manner.
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