Change of Control over Regulated Financial Companies in Morocco

Morocco regulates financial firms and institutions through a several statutes with changing regulatory authority. Therefore, obligations arising in respect to change of control do not arise from a single cross-sector statute but differ depending on the specific activity of the target. Transactions involving financial institutions therefore require a prudential regulatory assessment distinct from merger control and focused on the suitability of shareholders and the stability of the regulated entity. While the approach differs by type of regulated activity, a common principle applies. Where a transaction leads to a change in the person or persons capable of exercising decisive influence over a regulated financial firm or institution, the transaction may not be closed without prior clearance by the competent regulatory authority.

Regulations in the banking sector

Banks are supervised by Morocco’s Central Bank—the Bank Al-Maghrib. Any transaction resulting in a change of control of a bank requires the bank to apply for a new banking license from the Bank Al-Magrib. Prior to the new license being approved, the transaction may not be implemented.

Control is assessed on a functional basis and exists where a stakeholder acting alone or several stakeholders acting in concert, acquire the ability to exercise decisive influence over voting rights, management, or governance of a bank including through shareholder agreements, indirect holdings, or other arrangements conferring strategic decision-making powers. Hence, control may arise even without the acquisition of a majority stake. Veto rights over key decisions, such as board appointment rights or governance arrangements may be sufficient to establish control where they enable the stakeholder to influence the institution strategy or operations in a decisive manner.

The regulatory assessment is prudential in nature and aims to ensure the continued soundness and stability of the bank. The Bank Al-Maghrib reviews the identity, reputation, and professional suitability of the proposed new stakeholder. In this process the Bank Al-Maghrib will assess all entities and persons holding relevant stakes in the acquirer until the ultimate beneficial owner. Furthermore, the Bank Al-Maghrib will consider the source of the funds used for the acquisition. It also examines the acquirer’s financial capacity to support the bank and its business, the impact of the transaction on governance arrangements and the bank’s ability to comply on an ongoing basis with capital requirements, internal controls, and risk-management.

Where the acquirer forms part of a wider group, the regulator may assess the broader group structure and supervision arrangements, including the effective oversight of the Moroccan entity within the group. The Bank Al-Maghrib may request all information or clarifications it deems relevant and, where appropriate, require adjustments to governance or organizational arrangements before granting approval.

Regulations in the insurance sector

Insurance and reinsurance companies are regulated by the Authority for Insurance and Social Welfare Supervision (ACAPS). Unlike under the banking regime prior approval requirements for insurance businesses are not linked to change of control. Instead they are triggered by thresholds relating to the stake acquired.

Prior authorization from the ACAPS is required where (1) an acquisition results in a new majority shareholder in the target, (2) an entity or person acquiring increasing their stake in the target to 30% or more, or (3) any transfer or acquisition of at least 10% of the shares or voting rights in the target. The transaction may not take legal effect before approval is granted, meaning that share transfers, voting arrangements, or other instruments conferring influence cannot be implemented pending regulatory clearance.

The ACAPS’ assessment is prudential in nature and focuses primarily on the protection of policyholders and the sound management of the target. The authority evaluates the financial capacity, reputation and professional suitability of the acquirer. The ACAPS will assess all entities and persons holding relevant stakes in the acquirer until the ultimate beneficial owner. Furthermore, they will review the source of the funds used for the acquisition. Particular attention is given to the ability of the acquirer to support the insurer’s solvency position and to maintain adequate governance and risk-management arrangements after completion of the transaction.

The ACAPS may request detailed information regarding the acquirer’s group structure, business strategy and intended level of involvement in the management of the target. Where the transaction forms part of a broader group restructuring, the authority may assess the impact on supervision, reporting lines and the effective oversight of the entity. The regulator may oppose the transaction if it considers that the interests of policyholders, market confidence, or the stability of the entity could be adversely affected by the transaction.

Capital markets intermediaries

Financial intermediaries operating on the capital markets, including brokerage firms and certain investment service providers, fall under the supervision of the Moroccan Capital Market Authority (AMMC). Oversight is primarily exercised through licensing conditions and ongoing supervision. Regulated entities must continuously satisfy the conditions on which their authorization was granted, including requirements relating to shareholder suitability, governance and organizational structure.

Accordingly, material changes affecting the ownership or control structure, in particular the entry of a new significant or controlling shareholder, must be notified to the regulator. Following notification, the ACAPS may assess whether the entity continues to meet licensing conditions and may request information concerning the acquirer, its ownership chain, financial capacity, and governance intentions. Where concerns arise, the regulator may require adjustments before allowing the change to become effective.

Interaction with the Moroccan merger control

Prudential approvals operate independently from Moroccan merger control review and pursue different regulatory objectives. While the Moroccan Competition Council (MCC) examines whether the transaction may restrict competition or create problematic degrees of market power, financial regulators assess the identity and suitability of the acquirer and the impact of the transaction on the stability and sound management of the regulated entities.

Thus, obtaining competition clearance does not remove the need for sectoral regulatory approval, and conversely, approval from the financial regulator does not satisfy merger control requirements. Each authority applies its own process and may reach a different conclusion based on its mandate. A transaction may, therefore, be cleared from a merger control perspective but still be objected to or delayed for prudential reasons, particularly where concerns arise regarding the financial standing, governance structure or transparency of the acquiring group.

In practice, the two procedures generally run in parallel but follow different timelines and information requirements. Merger control review is primarily market-focused and transaction-based, whereas prudential review is acquirer-focused and may require extensive information on ownership structure, source of funds, governance arrangements, and business plans. Financial regulators may also request clarifications or impose conditions before granting approval, which can affect the overall transaction timetable.

From a transaction planning perspective, both approvals must, therefore, be treated as independent conditions precedent to closing. Parties should anticipate that the prudential review may extend beyond the competition review and should ensure that transaction documentation accommodates regulatory engagement and potential delays.