§ 15 — Meaning of “associate”

15.—(1) In this Part, a person (A) is an associate of another person (B) if —(a)

A is the spouse, or a parent, step‑parent or remoter lineal ancestor, or a son, stepson, daughter, stepdaughter or remoter issue, or a brother or sister, of B;

(b)

A is a partner of B in a partnership or limited liability partnership;

(c)

A is a corporation of which B is an officer;

(d)

B is a corporation of which A is an officer;

(e)

A and B are officers of the same corporation;

(f)

A is an employee of B;

(g)

B is an employee of A;

(h)

A and B are employees of the same employer;

(i)

A is the trustee of a discretionary trust if B (or another person who is an associate of B by virtue of any paragraph, except this paragraph and paragraphs (j) and (r)) benefits, or is capable (whether by exercise of a power of appointment or otherwise) of benefitting, under the trust, either directly or through interposed entities or trusts;

(j)

B is the trustee of a discretionary trust if A (or another person who is an associate of A by virtue of any paragraph, except this paragraph and paragraphs (i) and (r)) benefits, or is capable (whether by exercise of a power of appointment or otherwise) of benefitting, under the trust, either directly or through interposed entities or trusts;

(k)

A is a corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, if B is a corporation, of the directors of B;

(l)

B is a corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, if A is a corporation, of the directors of A;

(m)

A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, if B is a corporation, of the directors of B;

(n)

B is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, if A is a corporation, of the directors of A;

(o)

A is a related corporation of B or B is a related corporation of A;

(p)

A is a corporation in which B, alone or together with other associates of B as described in paragraphs (b) to (o), is in a position to control not less than 20% of the voting power in A;

(q)

B is a corporation in which A, alone or together with other associates of A as described in paragraphs (b) to (o), is in a position to control not less than 20% of the voting power in B;

(r)

A is a person with whom B enters, or proposes to enter, into an agreement or arrangement (whether oral or in writing and whether express or implied) that relates to any of the following matters:(i)

A and B being in a position, by acting together, to control any of the voting power in an entity;

(ii)

A and B acting together with respect to the acquisition, holding or disposal of equity interests or other interests in an entity;

(iii)

the power of A and B, by acting together, to appoint or remove —(A)

a director of an entity;

(B)

in the case of an entity that is a business trust — a director of the trustee‑manager of a business trust; or

(C)

in the case of an entity that is a trust other than a business trust and if the trustee of the trust is a corporation — a director of the trustee;

(iv)

the situation where one or more of the directors of —(A)

an entity;

(B)

in the case of an entity that is a business trust — the trustee‑manager of the business trust; or

(C)

in the case of an entity that is a trust other than a business trust and if the trustee of the trust is a corporation — the trustee of the trust,

are accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of A and B acting together;

(s)

A controls more than half of the voting power of a holding company of B;

(t)

B controls more than half of the voting power of a holding company of A; or

(u)

A is related to B in such other manner as may be prescribed by regulations made under section 57.

(2) A corporation (A) and another corporation (B) are deemed to be related to each other for the purposes of this section if A is —(a)

the holding company of B;

(b)

a subsidiary of B; or

(c)

a subsidiary of the holding company of B.

(3) For the purposes of this section, a corporation (A) is deemed to be a subsidiary of another corporation (B) if —(a)

B controls the composition of the board of directors of A;

(b)

B controls more than half of the voting power of A; or

(c)

A is a subsidiary of any corporation which is B’s subsidiary.

(4) For the purposes of subsection (3)(a), the composition of A’s board of directors is deemed to be controlled by B if, by the exercise of some power exercisable by B without the consent or concurrence of any other person, B can appoint or remove all or a majority of the directors, and for the purposes of this provision, B is deemed to have power to make such an appointment if —(a)

a person cannot be appointed as a director without the exercise in the person’s favour by B of such a power; or

(b)

a person’s appointment as a director follows necessarily from that person being a director or other officer of B.

(5) In determining whether one corporation (A) is the subsidiary of another corporation (B) —(a)

any shares held or power exercisable by B in a fiduciary capacity is treated as not held or exercisable by B;

(b)

subject to paragraphs (c) and (d), any shares held or power exercisable —(i)

by any person as a nominee for B (except if B is concerned only in a fiduciary capacity); or

(ii)

by, or by a nominee for, a subsidiary of B, not being a subsidiary which is concerned only in a fiduciary capacity,

is to be treated as being held or exercisable by B;

(c)

any shares held or exercisable by any person by virtue of the provisions of any debentures of A, or of a trust deed for securing any issue of such debentures, are to be disregarded; and

(d)

any shares held or exercisable by, or by a nominee for, B or its subsidiary (not being held or exercisable as mentioned in paragraph (c)) is to be treated as not held or exercisable by B if the ordinary business of B or its subsidiary (as the case may be) includes the lending of money and the shares are so held or power is so exercisable by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

(6) A reference in this section to the holding company of a company or other corporation is a reference to a corporation of which the last mentioned company or corporation is a subsidiary.

(7) For the purposes of this section, the Depository is not to be regarded as a holding company of a corporation by reason only of the shares it holds in that corporation as a bare trustee.

(8) Regulations made under section 57 may provide that any person or class of persons are not associates of another person for the purposes of any provision of this Part.

(9) In this section —“Depository” has the meaning given by section 81SF of the Securities and Futures Act 2001;

“officer”, in relation to a corporation, means a director or secretary of, or any person employed in an executive capacity by, the corporation.

—(1) In this Part, a person (A) is an associate of another person (B) if —(a)

A is the spouse, or a parent, step‑parent or remoter lineal ancestor, or a son, stepson, daughter, stepdaughter or remoter issue, or a brother or sister, of B;

(b)

A is a partner of B in a partnership or limited liability partnership;

(c)

A is a corporation of which B is an officer;

(d)

B is a corporation of which A is an officer;

(e)

A and B are officers of the same corporation;

(f)

A is an employee of B;

(g)

B is an employee of A;

(h)

A and B are employees of the same employer;

(i)

A is the trustee of a discretionary trust if B (or another person who is an associate of B by virtue of any paragraph, except this paragraph and paragraphs (j) and (r)) benefits, or is capable (whether by exercise of a power of appointment or otherwise) of benefitting, under the trust, either directly or through interposed entities or trusts;

(j)

B is the trustee of a discretionary trust if A (or another person who is an associate of A by virtue of any paragraph, except this paragraph and paragraphs (i) and (r)) benefits, or is capable (whether by exercise of a power of appointment or otherwise) of benefitting, under the trust, either directly or through interposed entities or trusts;

(k)

A is a corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, if B is a corporation, of the directors of B;

(l)

B is a corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, if A is a corporation, of the directors of A;

(m)

A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, if B is a corporation, of the directors of B;

(n)

B is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, if A is a corporation, of the directors of A;

(o)

A is a related corporation of B or B is a related corporation of A;

(p)

A is a corporation in which B, alone or together with other associates of B as described in paragraphs (b) to (o), is in a position to control not less than 20% of the voting power in A;

(q)

B is a corporation in which A, alone or together with other associates of A as described in paragraphs (b) to (o), is in a position to control not less than 20% of the voting power in B;

(r)

A is a person with whom B enters, or proposes to enter, into an agreement or arrangement (whether oral or in writing and whether express or implied) that relates to any of the following matters:(i)

A and B being in a position, by acting together, to control any of the voting power in an entity;

(ii)

A and B acting together with respect to the acquisition, holding or disposal of equity interests or other interests in an entity;

(iii)

the power of A and B, by acting together, to appoint or remove —(A)

a director of an entity;

(B)

in the case of an entity that is a business trust — a director of the trustee‑manager of a business trust; or

(C)

in the case of an entity that is a trust other than a business trust and if the trustee of the trust is a corporation — a director of the trustee;

(iv)

the situation where one or more of the directors of —(A)

an entity;

(B)

in the case of an entity that is a business trust — the trustee‑manager of the business trust; or

(C)

in the case of an entity that is a trust other than a business trust and if the trustee of the trust is a corporation — the trustee of the trust,

are accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of A and B acting together;

(s)

A controls more than half of the voting power of a holding company of B;

(t)

B controls more than half of the voting power of a holding company of A; or

(u)

A is related to B in such other manner as may be prescribed by regulations made under section 57.

(2) A corporation (A) and another corporation (B) are deemed to be related to each other for the purposes of this section if A is —(a)

the holding company of B;

(b)

a subsidiary of B; or

(c)

a subsidiary of the holding company of B.

(3) For the purposes of this section, a corporation (A) is deemed to be a subsidiary of another corporation (B) if —(a)

B controls the composition of the board of directors of A;

(b)

B controls more than half of the voting power of A; or

(c)

A is a subsidiary of any corporation which is B’s subsidiary.

(4) For the purposes of subsection (3)(a), the composition of A’s board of directors is deemed to be controlled by B if, by the exercise of some power exercisable by B without the consent or concurrence of any other person, B can appoint or remove all or a majority of the directors, and for the purposes of this provision, B is deemed to have power to make such an appointment if —(a)

a person cannot be appointed as a director without the exercise in the person’s favour by B of such a power; or

(b)

a person’s appointment as a director follows necessarily from that person being a director or other officer of B.

(5) In determining whether one corporation (A) is the subsidiary of another corporation (B) —(a)

any shares held or power exercisable by B in a fiduciary capacity is treated as not held or exercisable by B;

(b)

subject to paragraphs (c) and (d), any shares held or power exercisable —(i)

by any person as a nominee for B (except if B is concerned only in a fiduciary capacity); or

(ii)

by, or by a nominee for, a subsidiary of B, not being a subsidiary which is concerned only in a fiduciary capacity,

is to be treated as being held or exercisable by B;

(c)

any shares held or exercisable by any person by virtue of the provisions of any debentures of A, or of a trust deed for securing any issue of such debentures, are to be disregarded; and

(d)

any shares held or exercisable by, or by a nominee for, B or its subsidiary (not being held or exercisable as mentioned in paragraph (c)) is to be treated as not held or exercisable by B if the ordinary business of B or its subsidiary (as the case may be) includes the lending of money and the shares are so held or power is so exercisable by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

(6) A reference in this section to the holding company of a company or other corporation is a reference to a corporation of which the last mentioned company or corporation is a subsidiary.

(7) For the purposes of this section, the Depository is not to be regarded as a holding company of a corporation by reason only of the shares it holds in that corporation as a bare trustee.

(8) Regulations made under section 57 may provide that any person or class of persons are not associates of another person for the purposes of any provision of this Part.

(9) In this section —“Depository” has the meaning given by section 81SF of the Securities and Futures Act 2001;

“officer”, in relation to a corporation, means a director or secretary of, or any person employed in an executive capacity by, the corporation.