The Act introduced a new suite of powers for the Central Bank. The only provision that did not immediately come into force on 1 August gave a new power to the Financial Services Ombudsman to ‘name and shame’ financial institutions where certain criteria are met. This provision came into force on 1 September 2013. In our client briefing, we have summarised the headline changes – both good and bad – for clients.
In addition, clients who are authorised under the Investment Intermediaries Act 1995 (the ‘IIA’) should note that the Act introduces changes to the IIA which will enable firms who have not followed the IIA's procedures for pre-approval of ‘acquiring transactions’ to apply to the courts for an order permitting retrospective notification to the Central Bank.
The Central Bank first identified this issue in a 2011 letter to industry noting that some firms had not given the required notice of ‘acquiring transactions’ - particularly those in the retail intermediaries sector.
For the purposes of the IIA, an acquiring transaction is one which involves any direct or indirect acquisition or disposal of shares or other interest in an IIA firm (including non-retail IIA firms, such as fund service providers or other investment firms) which would mean that either:
- the proportion of voting rights or capital held by the person or persons making the acquiring transaction would [reach or] exceed a qualifying holding, or
- the proportion of voting rights or capital held by the person or persons making the acquiring transaction would reach or exceed 20%, 33% or 50%; or
- an authorised investment business firm would become a subsidiary of the acquirer.