GENE 8.1.3 Meaning of controller, types of control and first becomes a controller

(1) Controller, of an authorised firm, is a person who (whether alone or together with 1 or more associates) has acquired control over the firm through any of the following types of control described in FSR, article 37 (1):
(a) holding 10% or more of the shares in the firm;
(b) being entitled to exercise, or control the exercise of, 10% or more of the voting power in the firm;
(c) holding 10% or more of the shares in a parent entity of the firm;
(d) being entitled to exercise, or control the exercise of, 10% or more of the voting power in a parent entity of the firm;
(e) being able to exercise significant influence over the management of the firm or a parent entity of the firm because of the person's shareholding or voting power, or by contractual or other arrangements;
Guidance
Other arrangements include trusts, agreements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights. These arrangements could comprise a number of arrangements that would not individually enable the person to exercise a type of control over the authorised firm but would do so if they were taken together.
(f) being able to exercise, or control the exercise of, 10% or more of the voting power in the firm because of the person's shareholding or voting power in a third party that holds 10% or more of the shares of the firm;
(g) being able to exercise significant influence over the management of the firm because of the person's shareholding or voting power in a third party that holds 10% or more of the shares of the firm.
(2) In determining whether a person is a controller of an authorised firm, any shares, voting power or rights to acquire shares or voting power that the person holds in the firm (whether alone or together with 1 or more associates) must be disregarded if:
(a) the shares are held for the sole purpose of clearing and settling within a short settlement cycle;
(b) the shares are held as custodian or nominee and the voting power attached to the shares is exercised only in accordance with written instructions given to the person; or
(c) the person is an authorised firm and it:
(i) acquires shares as a result of an underwriting of a share issue or a placement of shares on a firm commitment basis;
(ii) does not exercise the voting power attached to the shares or otherwise intervene in the management of the issuer; and
(iii) retains the shares for less than 1 year.
(3) A person first becomes a controller:
(a) when the person becomes a controller of the firm for the first time; or
(b) if the person is not a controller of the firm but had previously been such a controller — when the person again becomes a controller of the firm.
Inserted by QFCRA RM/2014-1 (as from 1st February 2014).