(2)
The safeguards are intended to
prevent a related party from
taking advantage of its position and also to prevent any perception that it
may have done so.
(2)
to a transaction or arrangement
is, unless the contrary intention appears, a reference to the entering into
of the agreement for the transaction or the entering into of the arrangement.
(1)
any voting rights which such a person exercises (or controls the exercise
of) independently in its capacity as bare trustee, investment manager, collective
investment undertaking or a long-term insurer in
respect of its linked long-term business if no associate of
that person interferes by giving
direct or indirect instructions, or in any other way, in the exercise of such
voting rights (except to the extent any such person confers
or collaborates with such an associate which
also acts in its capacity as investment manager, collective investment undertaking
or long-term insurer); or
(2)
any voting rights which a person may hold (or control the exercise
of) solely in relation to the direct performance, by way of business, of:
(a)
underwriting the issue or sale
of securities; or
(b)
placing securities,
where the person provides a
firm commitment to acquire any securities which
it does not place; or
(c)
acquiring securities from
existing shareholders or the issuer pursuant
to an agreement to procure third-party purchases of securities;
and where the conditions in (i) to (iv) are satisfied:
(i)
the activities set out in (2)(a)
to (c) are performed in the ordinary course of business;
(ii)
the securities to
which the voting rights attach are held for a consecutive period of 5 trading days or less, beginning with the
first trading day on which
the securities are held;
(iii)
the voting rights are not exercised
within the period the securities are
held; and
(iv)
no attempt is made directly or
indirectly by the firm to intervene
in (or attempt to intervene in) or exert (or attempt to exert) influence on
the management of the issuer within
the period the securities are
held.
(1)
a transaction (other than a transaction 5in the ordinary course of business) between
a listed company and a related party; or
(2)
an arrangement (other than an arrangement in the ordinary course of business)5 pursuant to which a listed company and
a related party each invests
in, or provides finance to, another undertaking or asset; or
(3)
any other similar transaction or
arrangement (other than a transaction 5in the ordinary course of business)
between a listed company and
any other person the purpose
and effect of which is to benefit a related
party.
LR 11.1.5A
01/04/2013
FCA
3In
assessing whether a transaction is in the ordinary course of business under
this chapter, the FCA will have regard to the size and
incidence of the transaction and also whether the terms and conditions of
the transaction are unusual.
(1)
of a kind referred to in paragraph
1 or 1A6 of
LR 11 Annex 1 R (a
small transaction or a transaction
the terms of which were agreed before a person became a related party); or6
(2)
of a kind referred to in6 paragraphs 2 to 96 of
LR 11 Annex 1 R and
does not have any unusual features.
Note: If
an issuer is proposing to enter
into a transaction that could be a related
party transaction it is required under
LR 8 to obtain the guidance
of a sponsor to assess the
potential application of LR
11.
(1)
make a notification in accordance
with LR 10.4.1 R (Notification
of class 2 transactions) that contains the details required by that rule and also:
(b)
takes all reasonable steps to ensure
that the related party'sassociates do not vote on the relevant resolution.
LR 11.1.7A
01/10/2012
FCA
5If,
after obtaining shareholder approval but before the completion of a related party transaction, there is a material
change to the terms of the transaction, the listed
company must comply again separately with
LR 11.1.7 R in
relation to the transaction.
LR 11.1.7B
01/04/2013
FCA
5The FCA would (amongst other things) generally
consider an increase of 10% or more in the consideration payable to be a material
change to the terms of the transaction.
If a meeting of the listed company has been called to approve
a transaction or arrangement and, after the date of the notice of meeting
but before the meeting itself, a party to that transaction or arrangement
has become a related party,
then to comply with LR 11.1.7 R the listed
company should:
(1)
ensure that the related
party concerned does not vote on the relevant resolution and
that the related party takes
all reasonable steps to ensure that its associates do
not vote on the relevant resolution; and
(2)
send a further circular,
for receipt by shareholders at least one clear business
day before the last time for lodging proxies for the meeting,
containing any information required by
LR 13.3 (Contents of all circulars)
and LR 13.6 (Related
party circulars) that was not contained in the original circular with
the notice of meeting.
(2)
Where this rule applies, LR 11.1.7 R
does not apply but instead the listed
company must before entering into the transaction or arrangement
(as the case may be):
(a)
inform theFCAin writing of the details of the
proposed transaction or arrangement;
(b)
provide theFCA with written confirmation from7 a sponsor7 that the terms of the proposed transaction or arrangement with
the related party are fair
and reasonable as far as the shareholders of the listed
company are concerned; and
(c)
undertake in writing to theFCAto include details of the transaction
or arrangement in the listed company's next
published annual accounts, including, if relevant, the identity of the related party, the value of the consideration
for the transaction or arrangement and all other relevant circumstances.
Aggregation of transactions
in any 12 month period
LR 11.1.11
01/10/2012
FCA
(1)
If a listed
company enters into transactions or arrangements with the same related party (and any of its associates) in any 12 month period and the
transactions or arrangements have not been approved by shareholders the transactions
or arrangements, including
transactions or arrangements falling under
LR 11.1.10 R,
or small related party transactions under LR 11 Annex 1.1R
(1), 5 must be aggregated.
(2)
If any percentage
ratio is 5% or more for the aggregated transactions or arrangements,
the listed company must comply
with LR 11.1.7 R
in respect of the latest transaction or arrangement.
Note: LR 13.6.1 R (8) requires
details of each of the transactions or arrangements being aggregated to be
included in the circular.
(3)
If transactions or arrangements
that are small transactions under LR 11 Annex 1 R paragraph 1 are aggregated
under paragraph (1) of this rule and
for the aggregated small transactions each of the percentage
ratios is less than 5%, but one or more of the percentage ratios exceeds 0.25%, the listed company must comply with:
