Control over fintech tightened by the regulator in the UK - read in the blog of the company COREDO

Control over fintech tightened by the regulator in the UK

Updated: 09.07.2020

In Great Britain concluding the fintech deals is characterized by engaging many innovative firms and consumers. Recently, control over the sector was tightened by UK fintech regulators since there is a need to create M&A control mechanisms that would work more effectively.

Regulation of digital markets

Due to the never-ending and quick evolution of the digital marketplace, it is crucial to ensure that M&A deals’ control in the fintech sector of Great Britain is truly effective. All technical transactions including ones related to fintech are about to be inspected thoroughly by government authorities like the CMA. This examination is justified by the needed detailed control of fintech deals.

If you have more questions about antitrust compliance of M&A deals in the UK, COREDO’s specialists are prepared to assist you.

In recent times new recommendations on M&A deals in the fintech sector of Great Britain were published by the UK government. The document includes the creation of a DMTF as well. It was announced by the CMA that all players on the market must comply strictly with technical agreements. After Brexit, the regulator plans to overtake even tougher control over most fintech transactions.

Legal experts from COREDO are here to give consultation about how digital markets and online platforms are regulated in the UK.

The interventionism of the CMA

Lately, the higher level of the CMA’s involvement in mergers became visible. The CMA created a team dedicated to the identification of recent transactions that might concern the regulator. Nevertheless, regardless of these interventionist tendencies, the CMA sticks to its policies: not to get involved unless 3rd parties complain, or obvious problems were identified. Additionally, the CMA stated that foreign investment in critical UK infrastructure will fall under their control, too.

Transaction types that require getting permission

In the period of economic hardship, M&A deals that are controlled include:

  • Exchange of debt for shares (in the case when the purchase of shares gives the buyer the right to control the British company’s activities and strategy)
  • Registration of specialized funds in the UK
  • Acquisition of control over the business.

How M&A deals are structured in the UK

In Great Britain M&A deals are divided into three different stages of “acquiring control”:

  • Legal control – acquisition allows controlling stake in a British company
  • Actual control – purchase gives an ability to control the policy of a company
  • Significant impact – buyer can make an impact on strategic decisions in business.

M&A deals regulation in the UK

The EUMR still has influence in Great Britain even after Brexit. Although, the application of EUMR is necessary only for cases when the turnover of companies engaging in a transaction surpasses a specific amount. Monitoring mergers in the UK is processed by CMA and can be divided into two steps: initial and in-depth review.

Acquisition of a British company whose shares are listed on a stock exchange must be proceeded according to the requirements of the Code of Acquisition.

Are you interested in fintech mergers or M&A deals in Great Britain? Legal professionals in COREDO can provide you with more information.

Pandemic’s influence on the M&A deals assessment

According to its latest publication, the CMA acknowledges the powerful impact of COVID19 on the market. Still, the regulator puts emphasis on the fact that the approach to the assessment of M&A deals and its research standards are not changing.

Given the situation with the pandemic, the CMA will not imply disciplinary measures to those companies who were not able to provide statutory information that the regulator requires to be submitted by a certain date. The CMA stated that deadlines related to its operation will not change, however, advance notification of parties will take a longer time due to the problems with receiving information from the participants of M&A transactions.

When it comes to the CMA’s advice to the companies, it is recommended to organize meetings on distance and postpone application submissions. The regulator will not stop the analysis of changes brought by COVID19 and the introduction of temporary practices.

It might be extra difficult to stay on top of legal implications on mergers during the coronavirus pandemic. Yet, specialists from COREDO are ready to answer all your questions.

Why internal documents are important

The internal documents are extremely important according to the CMA because they are the source for the determination of future growth plans.

Do you need legal assistance while going through a technological merger? Legal advisors at COREDO will help you absolve this process without violating the regulation of the EU.

Merger control applied in Great Britain brings an opportunity to determine whether the competition regime is effective as well as to introduce some of the new proposals. Additionally, the risk of violations du

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