TSA Pre-Signing Review
A buyer side TSA review. Before the deal closes.
Fixed-fee proposal in 48 hours. Senior team on day one. The first conversation is always free.
A financial services carve out TSA is shaped by core banking systems, regulatory continuity, customer account portability, capital and liquidity transfer, and supervisory expectations that do not move on a buyer's schedule. The work runs inside the broader carve out advisory framework with a regulated industry overlay that the carve out team builds into the deal plan from the moment a letter of intent goes out.
Regulatory approval is the gating event for a financial services carve out. The Federal Reserve, the OCC, state banking departments, the SEC, FINRA, state insurance regulators, the FCA, the PRA, EBA, BaFin, and various local regulators each have their own application form, their own review timetable, and their own conditions for closing. The TSA cannot start running until the regulator approves the change of control, and the regulator will not approve the change of control until the buyer demonstrates operating readiness.
The Newco entity files a change of control notice, a management interest filing, and often a full new charter or license application. The application sets out the proposed officers, the proposed capital structure, the proposed risk framework, and the proposed information technology architecture. The TSA is itself a regulatory exhibit. Examiners will read it, ask questions about service continuity, and demand evidence that the buyer can stand on its own at the end of the runway.
The supervisory examination cycle does not pause for a transaction. The Newco entity inherits the seller's open examination findings on Day One. The buyer side review during pre signing catalogs every open MRA, every supervisory letter, every consent order, and every remediation in flight. The TSA addresses how the seller continues to support open examination work until the responsibility transfers cleanly.
Reporting calendars run on regulator imposed dates. Call reports, FOCUS reports, Schedule RC filings, FINREP and COREP filings, MiFIR transaction reports, and supervisory data submissions all have a Newco filer of record. The TSA covers the data extraction, the calculation logic, and the regulator facing submission until the Newco entity stands up its own reporting team.
Core banking, core insurance, brokerage platforms, and asset management systems sit at the heart of a financial services carve out TSA. Fiserv DNA, FIS IBS, Jack Henry SilverLake, Temenos Transact, Murex, Calypso, BlackRock Aladdin, and similar platforms cannot move on a casual schedule. The TSA carries the existing platform until the Newco entity either migrates to its own deployment or stands up an entirely new core. Each option has a 12 to 24 month runway.
Customer accounts have to migrate with continuity of identifiers where possible. Routing numbers, account numbers, brokerage account references, policy numbers, and contract identifiers carry customer expectations. The carve out plan agrees with the seller and the regulator how identifiers transfer or remap. The communication plan covers the customer notice, the statement transition, and the digital service continuity. A clumsy customer notice triggers a regulatory complaint volume that can delay supervisory approvals.
Authorized signers, beneficiaries, powers of attorney, and trust documentation transfer carefully. Each piece of customer documentation has a legal status that the Newco entity inherits. The data room rarely has clean records here. The carve out team builds the customer documentation register during the first 90 days and reconciles against the legacy systems before Newco assumes liability for misapplied instructions.
Custody arrangements, sub custodian relationships, and clearing agreements get their own track. Custodians require their own change of control approvals and their own onboarding. The TSA carries seller custody during the runway until the Newco entity establishes its own custody footprint. The work runs in parallel with the banking and treasury separation playbook.
Regulatory capital sits at the center of any banking or insurance carve out. The Newco entity capitalizes to a specific ratio on Day One. The capital structure is the regulator's primary concern and the buyer side review pressure tests it before signing. Risk weighted assets, leverage ratios, liquidity coverage, net stable funding ratio, and risk based capital all calibrate to the Newco balance sheet, not the seller's.
Funding sources transfer separately from the operating company. Wholesale funding lines, repo facilities, brokered deposits, and securitization vehicles all renegotiate or rebase under the Newco entity. The treasury function runs as its own program. The TSA covers treasury operations during the runway when the seller has the systems and the Newco entity has not yet hired the team.
Reserves, technical provisions, and policyholder liabilities (in insurance) transfer at the carrying values that the purchase agreement defines. The actuarial assumptions, the reserving methodology, and the supervisory disclosure all rebase under Newco. The handover team includes the chief actuary, the chief risk officer, and the supervisory liaison. The TSA is the operating bridge while the new function gets built.
Liquidity stress testing, capital planning, and recovery and resolution planning all rebase under the Newco entity governance. The Newco board approves the new capital plan, the new liquidity policy, and the new recovery plan before the first supervisory examination. The TSA covers the modeling capability until the Newco team stands up its own.
Anti money laundering, sanctions screening, fraud monitoring, and counter terrorism financing programs continue under the TSA from Day One. Customer due diligence files, enhanced due diligence records, sanctions watchlists, and transaction monitoring rules all carry across the entity boundary. The TSA service catalog covers the operating capability until the Newco entity stands up its own financial crime team and acquires its own monitoring platform.
Suspicious activity reporting, currency transaction reporting, and FINCEN filings have a Newco filer of record from Day One. The carve out team confirms the filer identifier, the filing channel, the escalation contacts, and the regulator notification cadence before close. Where the seller is the historical filer, the TSA covers the operating capability and the Newco entity files in its own name.
Operational risk events, customer complaints, and internal investigations transfer on a controlled basis. The Newco entity inherits the responsibility for events that occurred before close in some categories and assumes responsibility for events after close in others. The purchase agreement allocates the liability. The TSA addresses the operating support that delivers it. Without clear allocation, the buyer can find itself liable for events that happened years before the deal closed.
Cybersecurity and resilience programs run on a regulator timed cadence. SR 17 9, OCC bulletin guidance, EBA outsourcing guidelines, DORA in Europe, and similar regimes each require evidence of operational resilience. The Newco entity inherits the program and rebuilds it on a documented timeline. The TSA carries the capability during the rebuild. The work pairs with the carve out cybersecurity framework.
A financial services TSA gets written under regulator pressure and seller convenience. Neither party drafts it for the buyer. The buyer side review brings a financial services specific TSA checklist into pre signing diligence. Regulatory application readiness. Core platform coverage. Customer account portability. Capital and liquidity certainty. Compliance program coverage. Each item gets a buyer side estimate of cost, time, and risk before signing.
Extension fee curves in financial services TSAs default to seller favorable patterns because the regulator timeline often runs past the original term. The buyer side review rewrites the extension language so that delays caused by supervisory review do not trigger penalty escalations. The work pairs with the extension fees explained playbook.
Service level agreements in financial services TSAs have to align to regulatory expectations. Customer accessibility, transaction processing, fraud detection, and complaint handling all have supervisory benchmarks. The TSA SLAs cannot fall below those benchmarks because the regulator will not accept a supervised entity that runs below standard during the runway.
Financial services TSA reviews and exit programs are delivered under a Fixed Fee or Portfolio Retainer engagement model through TSA pre signing review and the Day One readiness program. The regulated industry overlay raises the supervisory discipline. The work runs faster when the buyer side review begins before signing rather than after the regulator opens questions.
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Fixed-fee proposal in 48 hours. Senior team on day one. The first conversation is always free.
Seven buyer-side moves to exit a Transition Services Agreement on time and below budget. The mark-up, the extension-fee curve, exit sequencing, and the 11-month calendar.
A representative $120M-revenue financial-services carve-out runs a Transition Services Agreement across eight functions while a regulator watches every cutover. The moves below cut the exit from an 18-month drift to an 11-month managed exit and remove $2.8M of mark-up and stranded cost — without missing a single supervisory deadline.
One tactic, one benchmark, or one pattern from a recent buyer-side engagement. Short. Signal heavy. Free.
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