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Notification to the FSA


Feb 17 2010

A recent case highlights the importance of keeping the FSA informed about changes to your business (and the need to obtain their approval before certain changes take place).

A recent case, reproduced below, highlights the importance of keeping the FSA informed about changes to your business (and the need to obtain their approval before certain changes take place).


Relevance – all regulated businesses


As a reminder, changes in control of a regulated business need to be approved by the FSA, before the event. You should also note that a failure in this respect may now lead to an unlimited fine!
Do please keep us informed of any changes that you plan to make and we will ensure that you avoid any such unpleasantness.


Semperian Limited Partnership pleads guilty to change in control offence
 

17 February 2010


Today, at the City of Westminster Magistrates Court, Semperian PPP Investment Partners Limited Partnership (Semperian) pleaded guilty to an offence under section 191(3) of the Financial Services and Markets Act 2000 by acquiring an authorised firm before it had received the necessary approval of the Financial Services Authority (FSA). Semperian notified the FSA in mid December 2008 that it proposed to acquire the authorised firm but failed to wait for FSA approval before completing the deal 3 weeks later.


The Deputy District Judge imposed a penalty of £1000 and said that Semperian had taken a calculated risk that the FSA would not prosecute. In determining the level of the penalty he took into account that the maximum fine that could be imposed, given the date of the offence, was £5000. He also took into account the fact that Semperian had pleaded guilty at the earliest opportunity and that there had been no adverse impact upon consumers.


Margaret Cole, director of the enforcement and financial crime division, said: "This is an example of a controller putting its commercial interests before its regulatory responsibilities and the FSA is taking a much tougher line with those that seek to avoid or ride roughshod over the change in control regime.


"This is a serious offence and the change in law means that future violations could result in an unlimited fine. Today’s result is a clear warning to other potential controllers that the FSA will prosecute change in control offences in appropriate cases."
This is the second prosecution the FSA has brought for change in control offences. The first was Vijay Sharma who pleaded guilty in 9 September 2009 for failing to notify the FSA of his acquisition.


Notes


1. The law changed on 21 March 2009 so that the courts now have the power to impose an unlimited fine for change in control offences committed after this date. In Semperian’s case, however, the maximum penalty that this court was able to impose for this offence was £5,000.


2. Any individual who takes a controlling interest in a firm despite receiving an objection from the FSA risks going to prison for up to two years.

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