Identifying controllers

We define a person as a controller if they hold:

• 10% or more of the shares in a UK-authorised person (A) or a parent undertaking (P) of A
• 10% or more of the voting power in A or P, or
• shares or voting power in A or P as a result of which they are able to exercise significant influence over the management of A

This is just an overview – for the full definition of controllers, see Section 422 of the Financial Services and Markets Act (FSMA)[1].

Shares

Shares are in relation to an undertaking:

• with share capital, allotted shares (including all classes of shares)
• with capital but no share capital, rights to share in the capital
• without capital, interests:
  • conferring any right to share in the profits, or liability to contribute to the losses, or
  • giving rise to an obligation to contribute to the debts or expenses in the event of a winding up

Voting power

Voting power in relation to controllers includes:

• voting power held by 2 or more parties that have an explicit or implicit agreement in respect of how they use their voting power (‘acting in concert’), and
• voting power which is held, or may be exercised by a subsidiary (and will be relevant in considering the level of control held by a parent undertaking)

We consider parents of minority controllers to be controllers of authorised firms. Read more about the extended definition of voting power in Section 422 of FSMA.