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Changes in Material Interest

Proposed Change of Material Interest

 

CLC Regulated Practices must notify the CLC of any proposed direct or indirect change of material interest, care and control.

Persons intending to hold a material interest must be declared to us in advance of any legal or financial settlement/completion, as they are subject to our approval and will be required to provide personal and financial information to enable the CLC to conduct its regulatory standard assessment of their fitness to own and manage.  

The Practice is also required to demonstrate that it can continue to meet its regulatory responsibilities subsequent to the proposed change of material interest, care and control taking place. They should notify their current PII Provider of the intended changes and timescales. Written confirmation from the insurer that they are content to continue to provide terms will be required.

All parties will be asked to provide evidence as to how the interest will be legally and financially obtained. Please be prepared to provide legal and financial information, which you may need to obtain from third parties such as legal or financial representatives, financial institutions.

The CLC routinely carries out AML, source of funds and source of wealth checks on material interest acquisitions. When the purchase of the material interest is dependent on the completion of any other legal or financial matter you will be required to provide this evidence as part of our due diligence. You will also be required to provide documents such as:

  • Current Shareholders agreement
  • Share Purchase Agreement
  • Proposed Shareholders Agreements
  • Confirmation Statements
  • Transfer Deeds
  • Investment documentation

The CLC may also consider that material interest is indirectly obtained through beneficial arrangements and associations involving relatives, spouses, and related business associations.

 

Guidance on Holding a Material Interest

 

Applications cannot be pursued when the person, body or its managers is subject to:

  1. ongoing criminal or financial investigation or proceedings taken by an enforcement body;
  2. ongoing regulatory and disciplinary allegations, investigations, proceedings and appeal processes taken by a regulatory or licensing body before the outcome of the adverse event is known, and any sanctions and financial penalties have been complied with; or
  3. a disqualification order applied by a regulatory or licensing body before the judgement has been successfully appealed; or (at the time of applying) had their licence/registration reinstated (i.e. restored free of conditions) by the original licensing/enforcement body.

 

The Process

 

Persons and Businesses acquiring a material interest must make themselves available to the CLC. This is so we can correspond directly with you to make enquiries and obtain assurances relevant to the application, and if necessary meet with you.

 

Practice should notify us by completing the online notification form below. The form will prompt you to explain the proposed changes.  You should provide a broad overview of the material changes and proposed legal and financial outcomes and intended timescales.

 

We will asked you to provide contact information for incoming or beneficial parties after we have reviewed the form. You should put incoming and beneficial parties on notice that they will be required to identify themselves and provide information of a potentially commercially sensitive nature to the CLC.

 

 

Practice Owners and Managers can request an online meeting, we are happy to do this as discussing the changes with practices and any incoming parties typically assists the process. If the arrangements appear complex, or result in significant changes to areas such as, the licensing, business, governance, and delegation structures, or the current practice’s risk profile. Then we are likely to invite you to meet with us to discuss these aspects with us in any case. Alternatively, if the changes appear moderate, we may request more detailed information by email, before determining whether a meeting is beneficial later on in the process.

 

 

  1. Incoming parties will be required to submit at least one application form. The number of forms that will be necessary is dependent on the nature of the changes, the identity of the incoming party, and changes to the practice’s key personnel. For example, does the change trigger an ABS or Recognised Body conversion, and therefore are new applications for key personnel required.
  2. Incoming parties should be prepared to provide corporate, personal, legal, financial, professional information and evidence.
  3. The persons holding the interest, or the appointed officers of an incoming body will at a minimum be required to complete BOOM and/or Registered Manager applications. Applications include standard fitness and screening checks, including DBS checks. Checks may apply to each and every acquisition of interest when more than twelve months apart. The CLC holds DBS records for twelve months before destroying them. Checks can take up to eight weeks to complete.
  4. All parties will be asked to pay the relevant application and screening fees up front. Our fees are explained here and are non-refundable.
  5. We endeavour to process applications between 42 and 90 days. The time taken to process an application is dependent on the complexity of the circumstances, and the efficiency of incoming parties to provide information and complete the screening process. At times, the process may be delayed by slow provision of third-party information. Applicants will also be delayed when associated individuals live outside of the UK and screening checks for foreign jurisdictions are required. Should a delay happen or be foreseen because of the nature of the circumstances, we will advise you.

 

 

  1. The CLC will provide a decision in principle. At which time PII, legal and financial arrangements can be executed. The decision in principle is valid for three months to provide a reasonable period for all legal and financial arrangements to conclude.
  2. The CLC may also consider whether it is appropriate in relevant circumstances to modify the practice licence and its permissions and conditions, including applying new conditions on to the practice. Should this happen we will advise parties in the decision in principle and explain why those steps were considered necessary.

 

How to Appeal

  1. If you are dissatisfied with the CLC’s decision you can appeal the decision within one month of the decision having been made. The appeal will be heard by the Discipline and Appeals Committee. Known as the Adjudication Panel which is an independent body.
  2. The Adjudication Panel (with a quorum of 3) will hear the appeal. No member of the Adjudication Panel is a member of the CLC Council or an employee of the CLC. Wherever possible the applicant making the appeal will be provided with the decision of the Adjudication Panel within 42 days of receipt of the request for the appeal. The Panel reserves the right to extend this to 90 days where needed.
  3. A party may appoint a representative (whether legally qualified or not) to represent that party in the proceedings. If a party appoints a representative, that party must send or deliver to the Adjudication Panel and to each other party written notice of the representative’s name and address.

 

Adjudication Panel Rules and Guidance

How to Appeal

Publication Policy

 

Your Right to Complain

We work to high standards when it comes to processing your personal information. If you have any queries or concerns, you can contact us at privacy@clc-uk.org . If you remain dissatisfied, you can make a complaint about the way we process your personal information to the Information Commissioner’s Office.

 

Download the Guidance for CLC Practices seeking to notify a change of material interest and persons or businesses seeking to hold a material interest here:

Guidance Notes

Notification Form

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