Financial Services Lawyers
We have specialist Financial Services Lawyers across a variety of our Corporate, Commercial, Regulatory & Compliance, Employment, Immigration and Dispute teams.
Financial Services Lawyers
We have a specialist team of financial services sector lawyers, all of whom have a wealth of experience advising businesses on their financial services considerations.
Herrington Carmichael’s team provides a full service in relation to financial services, from regulatory advice, M&A advice in the financial services sector, employment law specific to the sector, and disputes advice.
Regulatory & Compliance
Our Regulatory and Compliance teams have extensive experience advising household names operating in many sectors in the financial services industry, including high street banks, insurance companies, insurance brokers, pre-paid card providers and independent financial advisors.
We have advised clients operating in the financial services sector at every stage of their corporate life, from:
- Drafting and advising on Financial Conduct Authority applications,
- Advising and preparing associated policies and procedures for businesses just starting out in the financial services sector,
- Assisting long established financial services businesses with their compliance programs and reporting obligations.
FinTech
Financial technology (better known as fintech) describes new technology that improves and automates the delivery and use of financial services. This amalgamation has revolutionised how financial services are accessed, used and delivered.
Whilst FinTech companies have a keen understanding of both the financial and technological realms, the legal complexities linked to this merger can be daunting.
Herrington Carmichael will provide invaluable legal guidance to support and assist you with compliance with regulatory requirements, data and IP protections together with drafting and negotiating contracts for FinTech operations. In the event of disputes, our Dispute Resolution Team aim to resolve conflicts efficiently through our dispute resolution strategies.
Investment Fund Lawyers
Our team of Investment Fund lawyers provide a range of legal services and advice to clients across the financial services industry, from large institutions to start-ups, whether they are already regulated by the FCA or beginning their journey to authorisation and in the process of finding the best investment fund structure.
Setting up an Investment Fund
When running or setting up a business in the UK where there is a financial services element, it is important to consider whether any authorisations or registrations with the FCA are required.
Investment Fund Structure
It is important to speak to Investment Fund Lawyers about how to set up and structure the investment fund so that you ensure compliance with the FCA’s regulations and/or any FCA authorisation you have to operate the investment fund.
Financial Services Regulation Analysis
We would advise undertaking a regulated activities analysis on the specific facts and activities of your business, to make sure that any applications made to the FCA are productive and accurate for the purpose, and also so that the activities do not breach any of the stringent regulations for businesses conducting such activities.
Investment Fund Agreements
We can advise you on various investment fund agreements between both investors and portfolio companies.
FCA Compliance and regulatory policies and procedures
Investment funds will need to ensure their ongoing compliance with the FCA’s requirements, as well as having correct and up to date policies and procedures in place.
Our Experience
- undertaking regulatory analysis of an investment fund manager’s activities and making the successful FCA application for small authorised UK AIFM
- reviewing regulatory policies and procedures, including the regulatory business plan
- advising on IFPR consolidation rules
Sales and Acquisitions
Our dedicated team of financial services corporate lawyers provide specialist advice on all aspects of transactional work to the Financial Services industry. Led by Alex Canham, the Financial Services team is widely recognised as a specialist in the financial services industry, and has extensive experience of supporting businesses looking to grow by acquisition, shareholder sales and exits, and with restructuring.
Businesses that are regulated by the FCA have unique considerations in the context of a corporate transaction. These range from the requirements of the Financial Services & Markets Act and the FCA regulations, to the ways that they generate revenue and provide advice to their clients.
Our specialist team have extensive experience of navigating these points during a transaction and are able to deliver pragmatic legal solutions to achieve clients’ objectives.
The team are frequently invited to speak at industry events and forums and are recognised as specialists in this area of law.
Recent highlights of the team include:
- £60m sale of retained equity from 12 subsidiaries to national financial advisory consolidator
- £27.5m sale of discretionary fund manager
- £2.7m acquisition of entire issued share capital of independent financial advisory business
- £9m sale of financial advisory division of regional chartered accountancy practice
- £5.5m sale of financial advisory limited liability partnership
Dispute Resolution
Our Dispute Resolution lawyers cover a full range of disputes from the complex and high value to the more modest. We represent clients in the courts, arbitration tribunals and use alternative procedures, including mediation, to resolve disputes.
Our Dispute Resolution team can support you with:
- Business Disputes
- Contract Disputes
- Data Protection Breach
- Land & Property Disputes
- Intellectual Property Disputes
- Professional Negligence
- Debt Recovery
FCA Change in Control Assistance
If you wish to increase your control in an FCA-regulated firm (outside of the permitted control bands), or acquire control in an FCA-regulated firm, you will need to obtain prior approval from the FCA. If you fail to obtain prior approval, this is a criminal offence under section 191F of Financial Services and Markets Act 2000.
To apply for a change in control, you will be required to submit a section 178 notification. These can be completed for companies or for individuals. In some instances, you may be required to submit both. It is a tricky process to navigate, as you must demonstrate to the FCA that the proposed controllers meet the relevant regulatory requirements. To do so, you will likely be required to produce documentation to highlight the skills and experience the individual or company can bring to the role.
Our regulatory team has experience in submitting successful change in control applications and are able to act as the contact with the FCA, so we can ensure that if there are any follow up questions, these are answered carefully and promptly.
The FCA is currently experiencing long delays in processing change in control applications, and as such, it is more important than ever to make sure that your application is deemed to be ‘complete’ first time around.
We can assist in every step of the process, including the preparation of supporting documents and the submission to the FCA.
FAQs
I am starting a new business – does the business need to be authorised by the Financial Conduct Authority (FCA)?
The answer is very fact specific and will depend what your business will be doing. In order to confirm whether or not FCA authorisation is required, a regulated activities analysis should be performed. This involves mapping the activities of the business against the relevant regulated activities and available exemptions. The complexity of the regulated activities analysis will vary depending on the nature of the activities to be carried out by the business.
Alternatives to FCA authorisation are potentially available – for example becoming an appointed representative– please see below for more details.
Are there any alternatives to FCA authorisation?
If your business will be undertaking regulated activities, it will need to be authorised or exempt for those activities. Becoming an appointed representative of a business that is already FCA authorised is one potential alternative to your business becoming FCA authorised itself. Whether or not the appointed representative route is appropriate would depend on the surrounding circumstances and also the goals of the relevant business – there are pros and cons to becoming an appointed representative for example speed vs cost.
What type of sanctions can the FCA apply if the FCA rules are broken?
The FCA has wide-ranging powers to implement a number of different sanctions ranging from providing guidance, publicising enforcement action, imposing fines, to bringing criminal proceedings against directors personally. The exact sanction applied would depend on the nature of the breach and the surrounding circumstances.
Can I proceed with a change of control before I obtain approval from the Financial Conduct Authority?
The first stage would be to ascertain whether or not the proposed change in the business ownership and control amounts to a “change of control” for these purposes. If it does, the starting point is that it is a criminal offence to proceed with the change in control without the FCA’s approval. There are some limited exceptions which could potentially be available depending on the circumstances – a detailed analysis is required on a case-by-case basis.
I’m buying / selling a Financial Services firm: What approvals are required from the FCA?
If the business is directly authorised by the FCA and you are buying / selling shares in the directly authorised company / LLP, then the FCA must first approve the Buyer as the new owner before they can acquire the shares.
However, if you are selling the assets / clients of your firm, no approval from the FCA is normally required.
After the Sale of a Financial Services Business, what liability will I have for past advice I have given?
If you are selling your company, it is likely that the buyer will require you to give some assurances in relation to the past advice you have provided before the sale concludes. This is typically in the form of an “indemnity” (which means you must reimburse the buyer for any costs or liabilities it incurs in relation to a specific matter). However, these should be accompanied by appropriate limitations on your liability; such as a maximum time period (after which the indemnity expires), and obligations on the buyer to pursue professional indemnity insurance first.
Recent Work
£60m sale to national IFA
Our clients were the minority shareholders in 12 separate hub subsidiaries within a national group of financial advisers. We advised on the sale of their equity within each subsidiary to the national consolidator in exchange for loan notes that were redeemable on a refinancing of the national consolidator’s funding arrangements.
Norwegian Buyout
Our regulatory team advised the stakeholders of a large Norway based investment fund in connection with its buyout of the majority shareholder in the UK based, FCA authorised firm in which it held a minority position.
The SMF application was approved in 3 weeks and the change in control applications were approved in 8 weeks, both with minimal FCA.
Startup Support
Advising a start-up company in the financial services sector recovering sums for clients under Consumer Credit Act, to include setting up systems and processes.
Insurance Project
Advising & managing the legal aspects to create & roll out a white labelled insurance product across 12 countries in EMEIA and attainment of appropriate regulatory status in each country, to include drafting FCA application forms and advising on associated policies and procedures.
£27.5m sale
Our clients were the owners of a midlands-based discretionary fund manager firm. We advised on the sale of the entire issued share capital in the business to a nationally reputed discretionary fund management business.
£13.5m acquisition
Our client was a nationwide consolidating acquirer in the financial services sector who has recently acquired multiple IFA firms, and we advised it in their acquisition of a boutique financial advisory business to add to their portfolio which now holds more than one billion GBP of assets under advice.
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