How to Sell an FCA-Regulated Firm: A Step-by-Step Guide
Veritas Connect Team
M&A Regulatory Specialists
Selling a regulated financial services firm requires careful planning, regulatory compliance, and the right buyer. This guide covers everything from initial valuation to FCA change in control approval.
Selling an FCA-regulated firm is not like selling a typical business. The regulatory overlay adds complexity, but also creates value for the right buyers. Here's what you need to know.
1. Understand Your Licence Value
Your authorisation type (EMI, PI, Investment Firm) significantly affects valuation. A clean compliance record and established client relationships command premium multiples.
2. Prepare Documentation Early
Buyers and their advisors will scrutinise your compliance history. Prepare board minutes, MLRO reports, capital adequacy records, and client money reconciliations well in advance.
3. The FCA Change in Control Process
Any acquisition of 10% or more requires FCA approval. This process typically takes 60-90 working days. Buyers must demonstrate fitness and propriety, adequate resources, and sound business plans.
4. Confidentiality is Critical
News of a potential sale can unsettle staff, clients, and regulators. Work with advisors who understand discretion and use appropriate NDAs.