GENE 8.1.6 Meaning of voting power and control

(1) Voting power of a person in an authorised firm or a parent entity of the firm means the total rights of the person to vote, or take part in any decision-making, about any of the following:
(a) the distribution of capital or profits of the firm to its shareholders;
(b) the articles of association, partnership agreement or similar document constituting the firm or governing its activities;
(c) any variation of the share capital of the firm;
(d) any appointment of a director (however called) of the firm;
(e) the overall policy of the firm.
(2) A person's voting power includes:
(a) voting power held by a third party with whom the person has concluded an agreement that obliges the person and the third party to adopt, by concerted exercise of the voting power they hold, a lasting common policy towards the management of the firm or parent entity;
(b) voting power held by a third party under an agreement concluded with the person providing for the temporary transfer, for consideration, of the voting power;
(c) voting power attaching to shares that are lodged as collateral with the person, if the person controls the voting power and declares an intention to exercise it;
(d) voting power attaching to shares in which the person has a life interest;
(e) voting power that is held, or may be exercised in any of the ways described in paragraphs (a) to (d), by a subsidiary of the person;
(f) voting power attaching to shares deposited with the person that the person has discretion to exercise in the absence of specific instructions from the shareholders;
(g) voting power held in the name of a third party on behalf of the person; and
(h) voting power that the person may exercise as a proxy where the person has discretion about the exercise of the voting power in the absence of specific instructions from the shareholders.
(3) Control (of the exercise of voting power) includes direct and indirect control, and control that is exercisable as a result, or by means, of arrangements or practices:
(a) whether or not having legal or equitable force; and
(b) whether or not based on legal or equitable rights.
(4) If the percentage of total rights to vote or participate in decision-making differs as between different types of voting or decision-making, the highest of those percentages applies for the purposes of this rule.
(5) If a firm or parent entity:
(a) is limited both by shares and by guarantee; or
(b) does not have a share capital;
this rule has effect as if the members or policy holders of the firm or parent entity were shareholders.

Note FSR, article 37 (3) (B) states that voting power, in relation to an authorised firm or relevant parent entity which does not have general meetings at which matters are decided by the exercise of voting rights, means the right under the constitution of the authorised firm or relevant parent entity to direct the overall policy of the authorised firm or relevant parent entity or alter the terms of its constitution.

Editorial changes (as from 1st January 2016).