Company: FRFXF
Filing Date: 2025-10-09
Form Type: F-10/A
Source: 0001104659-25-098335
Chunk: 98

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-09
Form: F-10/A
Chunk 98
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qualifying parent undertakings” of U.K. authorized firms, even where those parent undertakings are not themselves regulated, provided that the parent undertaking is incorporated in the United Kingdom or has a place of business in the United Kingdom. This power of direction allows the PRA or the FCA to direct the parent to take, or refrain from taking, specified action or to remedy past actions in prescribed circumstances.

Change of Control of Authorized Firms

Under section 178 of FSMA, if a person intends to acquire or increase “control” over a PRA-authorized firm (including a Lloyd’s managing agent), it must first notify and get prior approval from the PRA before becoming a “controller” or increasing its level of control above certain thresholds. A person must also notify the PRA when the transaction that results in this acquisition or increase of control takes place.

A proposed “controller” for the purposes of the change of control regime is any natural or legal person (whether alone or “acting in concert” with other persons) who decides to acquire or increase, directly or indirectly, his, her or its control over a U.K. authorized firm.

“Control” over a PRA authorized firm is acquired if the acquirer:

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holds 10% or more of the shares or voting rights in that company or in its (direct or indirect) parent undertaking; or

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is able to exercise significant influence over the management of the firm by virtue of the acquirer’s shares or voting power in the company or its (direct or indirect) parent undertaking.

Increases of control of a PRA authorized firm require the consent of the PRA where they reach the thresholds of 20%, 30% and 50% of the shares or voting power in the firm or its parent. Reducing or proposing to reduce control below the relevant threshold also gives rise to an obligation to notify the PRA.

Breach of the notification and approval regime is a criminal offence.

The approval of Lloyd’s is also required in relation to the change of control of a Lloyd’s managing agent or member. Broadly, Lloyd’s applies the same tests in relation to control as are set out in FSMA and, in practice, where the application relates to a managing agent, coordinates its approval process with that of the PRA.

The same approval process applies in respect of FCA authorized firms. However, for FCA authorized firms that are non-Directive firms (e.g., non