English football has entered a new era. In July 2025, after a long journey set in motion by the attempted breakaway European Super League and the Fan-Led Review led by Tracey Crouch MP, the Football Governance Act came into force. It established a new Independent Football Regulator (IFR) in a landmark moment for the sport, designed to protect clubs nationwide by raising standards and securing the game's financial sustainability. With a string of recent near-financial collapses, think Bury, Macclesfield Town, Derby County, and Reading, the stakes could hardly be higher. From the 2027/28 season, every club must be licensed by the IFR and meet ongoing requirements to keep that licence, with a provisional licence approval process to be conducted for selected clubs during the 2026/27 season. 

A cornerstone of the IFR's new licensing regime is a stronger statutory Owners, Directors and Senior Executives (ODSE) test. Its aim is to ensure club custodians are suitable, financially sound and not relying on illicit financing. The regulator also has powers to force the sale of a club if an owner proves unfit, a backstop designed to safeguard the clubs and the communities they serve.

Who is caught by the rules?

The ODSE Test applies to two groups:

1. "Owners", including anyone who owns more than 25% of the shares or voting rights, or who otherwise has significant influence or control - even indirectly, through companies, trusts or similar arrangements; and
2. Individuals in one of the six Senior Management Functions (SMFs): Chair, Chief Executive, Chief Finance, Chief Operations, Director (including shadow directors), and Other Key Decision Makers (which captures those who, even if not on the board, have real sway over the club's management or regulated activities). For this note, we'll call these people "Senior Managers". 

Interestingly, the new ODSE test closely mirrors the Financial Conduct Authority's Senior Managers Regime. At its core is the familiar "fit and proper" standard, now applied squarely to football club leadership. Misconduct is classified into three levels of seriousness with sanctions set to reflect the gravity of the breach.

This article is focused on the test and implications for owners. For how the new test applies to Senior Managers and clubs, see our separate article here.

Prospective owners need to take this seriously. The obligations and significant sanctions apply not only to the regulated club, but also to the individuals seeking to acquire a stake in the club. 

From when is it in force?

The new ODSE test has applied to incumbent owners and Senior Managers (i.e. those already in the role) since 12 December 2025. 

Assessments for new owners and Senior Managers are expected to begin in May 2026. 

Who classifies as an 'owner'?

Owners are either individuals or registered societies that meet one or more of the following conditions:

• The person has the right to exercise, or actually exercises, significant influence or control over the activities of the club (in whole or in part);
• The person holds, directly or indirectly, more than 25% of the shares in the club;
• The person holds, directly or indirectly, more than 25% of the voting rights in the club;
• The person holds the right, directly or indirectly, to appoint or remove an officer of the club.

Owners may also include trustees of a trust or members of a partnership/unincorporated association/other body that is not a legal person, where the trustees or members meet one or more of the above conditions and the trustees or members have the right to exercise, or actually exercise, significant influence or control over the activities of that trust or body (in whole or in part). 

The legislation and guidance cover a range of further points of detail that need to be considered in determining who constitutes an owner, including for example: how to deal with shares or rights jointly held, 'joint arrangements' in relation to shares or rights, how to calculate the shareholding percentage, issues arising in relation to voting rights, how to identify indirect shareholdings and rights, how nominee holdings should be treated, control of rights, limited rights and shares held as security.

What do clubs and individuals have to do?

The regime turns on transparency, approval and ongoing accountability. Clubs and individuals must notify the IFR when there is a "reasonable prospect" that someone will become an owner. This is likely to be triggered once the club has identified a bid that is likely to result in a new owner rather than having to notify all bids to the IFR.  That said, it is likely to be helpful to notify the IFR at a relatively early stage to make sure the IFR's assessment is conducted as efficiently as possible, and all parties are aware of the information that will need to be provided. A more detailed application, in the IFR's prescribed form, must also be submitted to the IFR in respect of the prospective owner. No one can take up ownership position until this formal application is submitted and the IFR has decided they are suitable. Note that if an owner is also taking up a SMF (such as executive Chair or CEO), they will also need to submit an application to the IFR in respect of that SMF position. 

Suitability means different things depending on the role, but the themes are consistent. Owners must demonstrate honesty and integrity, financial soundness, and that they have sufficient resources to support the club. They must also satisfy the regulator that their wealth does not come from serious criminal conduct. Those in SMF roles must meet these honesty and financial thresholds too, and, on top of that, show they are competent for the specific job at hand.

What does "fit and proper" look like in practice?

Honesty and integrity

The IFR looks at a wide set of factors when assessing honesty and integrity. That includes criminal matters (even if the conduct happened outside the UK), findings from courts or tribunals, past regulatory or disciplinary action, immigration and sanctions status, and whether a person has misled or failed to cooperate with regulators or governing bodies. It is a holistic assessment, not a tick‑box exercise.

Financial soundness

Financial soundness is equally broad. Personal insolvency events will matter. So will the financial health or insolvency of organisations where the individual held responsibility. If someone has had a hand in financial mismanagement elsewhere, that history will attract scrutiny.

Competence

Competence (which is relevant for those taking up SMF positions, but not all owners) is considered in context. Football experience helps but is not mandatory. What matters is whether the person has the skills and track record for the specific SMF role in the circumstances of the club. 

What happens after an owner is approved?

Approval is not a one‑and‑done event. Crucially, the IFR can reassess suitability if it receives information raising grounds for concern or suspicion. If, after a fair process, the IFR decides that an owner is no longer suitable for their role, it can remove or ban that person or issue directions that limit what they can do at the club. Decisions are notified and published, and there are routes to challenge them through internal review and, where appropriate, appeal to the Competition Appeal Tribunal.

There is also a continuing duty to disclose. Clubs and individuals must notify the IFR as soon as reasonably practicable if something material changes that could affect suitability. 

So, what does this mean for clubs?

Clubs will want to must make sure its owners continue to meet the suitability standards. If they don't, there's a real risk of disruption if they are removed, disqualified, or have their powers limited (and the IFR has an extensive toolkit to do so) - which can affect everything from a club's finances to its strategy and day‑to‑day operations. And as we all know, success on the pitch isn't just about talent or form on the day, it's underpinned by the club's wider plan and how well it's run (and funded) behind the scenes.

Clubs will want to take steps to reduce their risk exposure. How this is achieved will very much depend on the specific business model clubs have in place. 

Sanctions for Owners

Owners should recognise the personal risks of breaching the IFR's rules, particularly in relation to cooperating with the regulator.

Sanctions may be imposed for a range of infringements. Infringements that may be committed by owners include:

• failure to notify the IFR of prospective club ownership or relevant change of circumstances,
• failure to comply with a removal or conduct direction or removal order,
• failure to comply with a commitment accepted in lieu of an IFR enforcement investigation, and
• failure to comply with any urgent IFR direction or any rule made by the IFR. 

Other potential infringements include failure to co-operate with or assist or otherwise obstruct certain individuals.  The available sanctions include a censure statement, injunctive relief and a financial penalty.

The potential personal financial exposure is significant. For owners, the maximum financial penalty that may be imposed is a fixed amount equal to 10% of the total revenue of the club (both inside and outside the UK), or a daily rate equal to 10% of the daily revenue of the club (both inside and outside the UK) or a combination of both. That said, the amount of any financial penalty imposed will take into account the seriousness of the breach, any aggravating or mitigating factors, proportionality and deterrence. 

It remains to be seen whether the IFR will directly enforce sanctions against individuals. At least initially, the IFR is likely to present itself as a friendly and collaborative regulator that works with clubs and individuals to resolve issues. However, in serious cases we expect the IFR to pursue clubs and individuals for non-compliance with its rules without hesitation.

Top tips for owners

The IFR will not, at least in the beginning, be imposing a particular business model on clubs, acknowledging that clubs are currently operating under a variety of different business models. However, prospective owners will be required to provide a business plan, with full costings and details of how those will be funded with it being crucial to show that a prospective owner has sufficient financial resources to become an owner of the football club in question.  What the business plan should look like may well be influenced in time by the outcome of the IFR's State of the Game report. The IFR is currently consulting on the terms of reference for that report, which closes on 17 February 2026.  Following that the IFR will prepare and consult on a draft final report.  This will therefore lead to a period of uncertainty for prospective new owners who from May 2026 will be subject to the new IFR owners regime, but the evaluation of that ownership could change after the State of the Game final report. 

Looking for practical guidance on how the new ODSE rules affect your club and how to stay protected? Get in touch with your usual Lewis Silkin contact or speak to a member of our Corporate team.