Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Parent Undertaking definition

What does Parent Undertaking mean? In practice, a parent undertaking is an entity that controls another entity (its subsidiary undertaking) within a corporate group. Across England and Wales, Scotland and Northern Ireland, the term is defined in section 1162 of the Companies Act 2006 for accounting and group purposes. An undertaking is a parent undertaking if, for example, it: holds a majority of the voting rights; is a member with the right to appoint or remove a majority of directors; controls a majority of voting rights under an agreement with other members; or has the right, under the subsidiary’s constitution or a contract,...

Directions, information-gathering and enforcement against qualifying parent undertakings under FSMA 2000 Part 12A (UK): FCA and PRA powers, procedure and consolidated supervision

Published by a LexisNexis Financial Services expert

Practice notes

Regulator powers in relation to parent undertakings

In pursuit of the government’s goal of more rigorous oversight of the financial system—prompted by problems exposed after several prominent firm failures—the Financial Services Act 2012 introduced a range of fresh tools to the regulators’ armoury. Chief among these are the measures in Part 12A of the Financial Services and Markets Act 2000 (FSMA 2000), which address the powers the FCA and PRA may exercise over ‘parent undertakings’ (as defined in FSMA 2000, s 420; see also the Glossary to the FCA Handbook). The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) hold broadly equivalent powers for this purpose. The suite of powers in FSMA 2000, ss 192A–192N, is connected to those in FSMA 2000, Pt XII, which concern control over authorised persons. As with any corporate form, parent undertakings can wield considerable influence over the decision making of regulated firms, and the regime recognises and addresses that capacity. Accordingly, FSMA 2000 provides both authorities with parallel mechanisms to respond where a parent’s influence affects a regulated firm...

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Web page updated on 21/05/2026

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