Under Section 111(1) and 118 (1) of the Financial Services Act 2019 (the Act), a Regulated Firm will require GFSC approval before any Individual/Body Corporate/Trust acquires or increases control over a Gibraltar regulated firm and must give the GFSC notice before making the acquisition.
Section 131(3) of the Act confirms this application is required for all Controllers with 10% or more of the shares in a Regulated Firm or a parent undertaking of the Regulated Firm.
The Regulated Firm is to submit a Controller Form for each Individual/Body Corporate/Trust application.
Please ensure we receive two structure charts, one reflecting the current structure and another reflecting the proposed changes. The structure charts should include the nature of the relationship between the RI Firm and each of its controllers.
Please also provide further information regarding the change in control, including the rationale for the changes.
Please submit this form via E-mail to email@example.com with the following information in the subject field: ‘Name of Regulated Firm – Controller’ . Paper copies are not required unless indicated by the Authorisation team.
Please note that we accept signed signature copies sent via e-mail and electronic signatures, which must originate from the Regulated Firm’s domain.
We may also request a meeting to discuss a Controller application as part of our assessment criteria.
For details of application fees, please see Schedule 3 of the Financial Services (Fees) Regulations 2020.
Reducing or ceasing to have control
Section 116, 127 & 128 of the Act states the requirements to notify the GFSC when a Controller reduces or ceases control over a Regulated Firm.
A Controller reduces control over a Regulated Firm whenever–
(a) the percentage of shares decreases by any of the steps mentioned below;
(b) the percentage of voting power decreases by any of the steps mentioned below; or
(c) ceases to be parent undertaking.
The steps are–
(a) from 50% or more to less than 50%;
(b) from 30% or more to less than 30%; or
(c) from 20% or more to less than 20%.
A Controller ceases to have control over a Regulated Firm if it ceases to be in the position of holding–
(a) 10% or more of the shares in the Regulated Firm or in a parent undertaking;
(b) 10% or more of the voting power in the Regulated Firm or in a parent undertaking; or
(c) shares or voting power in the Regulated Firm or in a parent undertaking as a result of which the Controller is able to exercise significant influence over the management of the Regulated Firm.
Notices under section 127
Please submit an e-mail notification to firstname.lastname@example.org with the following information in the subject field: ‘Name of Regulated Firm – Controller’. Paper copies are not required unless indicated by the Authorisation team.
We will require a rationale for the notification and a proposed date when the firm envisages that the shares will be transferred. Firms must submit this notification before any changes take effect.
Please ensure we receive two structure charts, one reflecting the current structure and another reflecting the changes after the proposed reduction or ceasing of control. The GFSC may impose different requirements for different cases and may vary or waive requirements in particular cases.
We may request a meeting to discuss this notification as part of our supervisory approach.
Mergers & Acquisitions
This section applies for Acquisitions that do not fall within scope of Part 20 of the Act.
Should an entity wish to purchase an interest or merge with a GFSC Regulated Firm, it should consider the requirements under the respective laws and regulations that govern the particular industry of that licensee.
Early interaction with the Authorisations team, as well as setting a precise timetable and providing information on a timely basis, is more likely to result in issuing approval in line with the commercial timetables that the Acquirer and Target Regulated Firm may have.
Before the Acquirer begins the application process for a Merger or Acquisition, we ask that they contact the Authorisations team in the first instance to set up a meeting. As part of this meeting, we would require certain information in order to expedite the approvals process for both acquisitions and changes to business plans. The Authorisations team can facilitate Zoom/Conference Calls for meetings.
Please submit requests for a meeting to email@example.com (using the Target Regulated Firm’s name in the subject field), and including the following information:
Details for the contact person for this Merger or Acquisition:
- Name, E-Mail, Telephone Number, Address.
- Available dates for the Pre-Application Meeting. Please confirm who will be attending on behalf of the Acquirer and Target Regulated Firm, and in what capacity.
- Is the Acquirer working towards specific timelines?
- Name and details of Acquirer and information on the Target Regulated Firm being acquired.
- Is the Acquirer part of a Group?
- Consideration for the proposed Merger or Acquisition, as well as how the price will be determined, and how/where the deal will be financed.
- Does the Acquirer, or anyone connected to the Acquirer need to disclose information to the GFSC, which may affect the Merger or Acquisition (for example, and not limited to: filed for bankruptcy, administrator appointed, subject to a criminal or regulatory investigation, etc.).
The Authorisations team is available to discuss any of the above questions with the Acquirer before they make their application.
Please note that a successful meeting is not an indicator on any final decision by the GFSC. The Authorisations team is not able to make business assessments on behalf of Acquirers nor is it able to provide advice on the criteria for licensable activity. It is at all times the responsibility of the Acquirer to ensure that they act in accordance with legislative requirements and should the Acquirer wish to have a position clarified at any stage, we would recommend they seek legal advice.
Any new members from the Acquirer carrying out a Regulated Individual function within the Target Regulated Firm is required to submit a Regulated Individuals Form. For further information, please visit our Regulated Individuals page.
The Acquirer will need to submit a Controller Form for each Individual/Body Corporate/Trust involved as part of the Merger or Acquisition.
In addition, we require the following information:
- Certified documents to support the identity of the Acquirer as well as the register of directors and shareholders.
- If the Acquirer is part of a Group, please provide a detailed organisation chart with information on shareholdings and voting rights.
- Details of the Board of the Acquirer and of the ultimate controlling entity where relevant as well as any other persons who effectively direct the business.
- Details of the controllers, beneficial owners and ultimate controlling parties of the Acquirer.
- Details of any other voting rights not captured by any of the above.
- Nature and location of business and operations.
- Information of any proceedings against or investigations of the Acquirer.
- Audited Financial Statements of the Acquirer and Group where relevant for the last three financial periods. Where the proposed Acquirer is newly established entity, please provide forecast financial information including the profit and loss, balance sheet and cash flow.
- The nature of the interest being acquired.
- Proposed date of acquisition.
Information related to the financing of the Merger or Acquisition:
Source of funds information including:
- Details on use of private resources and documentation on origin and availability.
- Details on means of payment and network used to transfer funds.
- Information on borrowings and details of facilities to be granted.
- Information on financial arrangements with any other shareholders of target entity.
- Information on assets that might be sold to finance the acquisition.
- Any proposed changes to board composition.
- Any proposed changes to the shareholding structure.
- Any proposed changes to the business plan or a re-submission of existing business plan.
- Any changes expected to financial forecasts.
- Any changes expected to the level of regulatory capital.
- Impact assessment on how the changes will affect the business.
- Description on how the Regulated Firm will transfer the business, including timescales, key milestones and communication to clients. These details should include if clients will continue to operate under the same terms and conditions.
- Due diligence performed on Acquirer by Controller of/or Regulated Firm.
- Information on any communications to the public and the expected timing of these.
- Communication plan for clients including details of those communications.
- The GFSC may require an auditor’s confirmation as prescribed in our newsletter. Should this be required, we will inform you once the above information has been submitted.
- Should there be a material change to the existing business plan a new application fee may apply.
Acquisitions – under Part 20
This Part transposes the Takeover Bids Directive, and applies to takeover bids for the securities of companies governed by the law of Gibraltar or other EEA States, where all or some of those securities are admitted to trading on a regulated market–
(a) in Gibraltar; or
(b) in Gibraltar and one or more other EEA States.
Please send an E-mail to the Authorisations Team if a Regulated Firm requires approval for an acquisition under Part 20.