Investment company for sale: who approves the buyer, and when.

Yes, by buying the firm that holds it. The licence was granted to that company and stays there, so the deal is a purchase of shares and the regulator assesses you as the new owner: before closing in the EU, the UK, Hong Kong, Singapore, the Cayman Islands and the Bahamas, after it in Australia and Vanuatu. Everything the firm did before you arrived comes with it, which is why due diligence goes first.

Not on its own: an offer of a broker dealer license for sale is really an offer of the firm that holds it. Vanuatu's Act forbids assigning or transferring a licence at all, and elsewhere the licence stays with the firm it was granted to. The US has only a temporary bridge: a successor that takes over a broker-dealer's business keeps working under the old SEC registration if it files Form BD within 30 days and the predecessor files Form BDW, until 45 days after the successor's Form BD is filed, and FINRA still has to approve the transfer of the business (Rule 1017(a)(3)). Selling the business rather than the shares needs its own consent in Malta and Belize; in Singapore it needs a notice to MAS 7 days before the agreement is signed, and the buyer needs its own licence.

In the EU it is 10% or more of the capital or votes, or a smaller stake that gives significant influence; the buyer notifies again on crossing 20%, 30% and 50%, and UK MiFID firms use the same 10%. The buyer also files in Hong Kong, above 10%, and in Switzerland, from 10%, where it is a notice rather than an approval. Singapore counts from 20% and wants applications from both the buyer and the firm. In the US the broker-dealer itself files Form CMA once someone reaches 25%.

In the EU and the UK, 60 working days from the acknowledgement of a complete notice, with one pause for questions of up to 20 working days, or 30 for a buyer from outside or for one not supervised as a bank, investment firm, insurer or UCITS manager, private individuals included; if the regulator says nothing by the end, the deal counts as approved. FINRA serves its decision within 30 days after the membership interview or the last documents, or within 45 days after filing if it asks for nothing more. Hong Kong, Singapore, the Cayman Islands and the Bahamas set no deadline; Seychelles works to 6 weeks and the BVI to 3 for a complete file.

MiFID II art. 13 names five things: the buyer's reputation, the reputation and experience of the people who will run the firm, the buyer's financial soundness, whether the firm will keep meeting prudential rules, and any money-laundering risk. Hong Kong frames it the other way round: the SFC refuses unless the firm will remain fit and proper after the purchase. FINRA wants the new owners' names, their percentages and the source of their funding, and its Form CMA page asks for evidence such as three months of bank statements.

Buy when a firm with a clean record already holds the registrations and memberships you need; the alternative in the US is a fresh Form BD, a FINRA new member application and net capital paid in before the first trade. Apply when every target on offer brings complaints, conditions or owners with a past. A US buyer can even close before FINRA decides, yet a final denial leaves the firm 60 days to re-apply, reverse the purchase or give up its registration.

Look it up in its regulator's register first: BrokerCheck in the US, the SFC register in Hong Kong, the MAS directory in Singapore, the FCA register in the UK, the ESMA register for EU firms. Then ask the seller for the latest capital computation, letters from the regulator, complaints and disputes, the whole ownership chain and proof that its own stake was approved. Read the licence conditions too: a Hong Kong Type 9 manager may be licensed on condition that it never holds client assets.

They stay where they are: a share sale changes the owner, not the firm. Capital has to stay above the regulator's floor through closing and afterwards, and new directors or officers are vetted in their own right. The paperwork after closing differs: the Hong Kong firm reports its new controlling persons within 7 business days, a US broker-dealer amends Form BD promptly, and an Australian licensee notifies ASIC within 30 business days.

Check what the quiet years have cost it. Vanuatu may revoke a licence once services have stopped for 6 months. A Cayman licence lapses if the renewal fee due on 15 January is still unpaid three full months later, and after that it can be renewed only within one more month, with the surcharges and a 10% administration fee. Capital rules apply whether the firm trades or not, so a Seychelles securities dealer must still keep US$100,000 in its bank account. A firm that has been idle for a while may also have lost the officers its licence was granted on.

There is no list price: sellers price the permissions, the capital already inside, the client book and the people who stay. The official fees are small and fixed: US$5,000, US$10,000 or US$15,000 for a FINRA ownership change depending on headcount, HK$3,000 at the SFC, US$5,000 or US$10,000 at the DFSA, B$625 in the Bahamas, US$500 in Seychelles, nothing at the MFSA and no fee listed by ASIC. We set our own fee in writing once a free assessment is done.