(1) A supervisory authority shall refuse to approve an acquiring transaction where it is not satisfied as to the suitability of the person proposing to make the acquiring transaction or where the supervisory authority considers that the acquiring transaction is likely to be prejudicial to the sound and prudent management of an authorised investment business firm or the proper and orderly regulation and supervision of an authorised investment business firm or both.

(2) Where a supervisory authority refuses to approve an acquiring transaction or where a supervisory authority becomes aware of a proposed acquiring transaction of which it has not been notified under section 39 of this Act a supervisory authority may issue a direction under section 21 of this Act to the directors and those responsible for the management of an authorised investment business firm concerned.