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controller

  1. (1) (in relation to a firm or other undertaking ("B"), other than a non-directive firm) a person ("A") who (whether acting alone or in concert):
    1. (a) holds 10% or more of the shares in B or in a parent undertaking ("P") of B;
    2. (b) holds 10% or more of the voting power in B or in P; or
    3. (c) holds shares or voting power in B or P as a result of which A is able to exercise significant influence over the management of B.
  2. (2) (in relation to a non-directive firm ("B")) a person ("A") who (whether acting alone or in concert):
    1. (a) holds 20% or more of the shares in B or in a parent undertaking ("P") of B;
    2. (b) holds 20% or more of the voting power in B or in P; or
    3. (c) holds shares or voting power in B or P as a result of which A is able to exercise significant influence over the management of B.
  3. (3) for the purposes of calculations relating to (1) and (2), the holding of shares or voting power by a person ("A1") includes any shares or voting power held by another ("A2") if A1 and A2 are acting in concert.
  4. (4) shares and voting power that a person holds in a firm ("B") or in a parent undertaking of B ("P") are disregarded for the purposes of determining control in the following circumstances:
    1. (a) shares held for the sole purposes of clearing and settling within a short settlement cycle;
    2. (b) shares held by a custodian or its nominee in its custodian capacity are disregarded, provided that the custodian or nominee is only able to exercise voting power attached to the shares in accordance with instructions given in writing;
    3. (c) shares representing no more than 5% of the total voting power in B or P held by an investment firm, provided that:
      1. (i) it holds the shares in the capacity of a market maker (as defined in article 4.1(8) of MIFID);
      2. (ii) it is authorised by its Home State regulator under MIFID; and
      3. (iii) it does not intervene in the management of B or P nor exerts any influence on B or P to buy the shares or back the share price;
    4. (d) shares held by a credit institution or investment firm in its trading book are disregarded, provided that:
      1. (i) the shares represent no more than 5% of the total voting power in B or P; and
      2. (ii) the credit institution or investment firm ensures that the voting power is not used to intervene in the management of B or P;
    5. (e) shares held by a credit institution or an investment firm are disregarded, provided that:
      1. (i) the shares are held as a result of performing the investment services and activities of:
      2. (A) underwriting share issues; or
      3. (B) placing shares on a firm commitment basis in accordance with Annex I, section A.6 of MIFID; and
      1. (ii) the credit institution or investment firm:
      2. (A) does not exercise voting power represented by the shares or otherwise intervene in the management of the issuer; and
      3. (B) retains the holding for a period of less than one year;
    7. (f) where a management company and its parent undertaking both hold shares or voting power, each may disregard holdings of the other, provided that each exercises its voting power independently of the other;
    8. (g) but (f) does not apply if the management company:
      1. (i) manages holdings for its parent undertaking or an undertaking in respect of which the parent undertaking is a controller;
      2. (ii) has no discretion to exercise the voting power attached to such holdings; and
      3. (iii) may only exercise the voting power in relation to such holdings under direct or indirect instruction from:
      4. (A) its parent undertaking; or
      5. (B) an undertaking in respect of which of the parent undertaking is a controller;
    9. (h) where an investment firm and its parent undertaking both hold shares or voting power, the parent undertaking may disregard holdings managed by the investment firm on a client by client basis and the investment firm may disregard holdings of the parent undertaking, provided that the investment firm:
      1. (i) has permission to provide portfolio management;
      2. (ii) exercises its voting power independently from the parent undertaking; and
      3. (iii) may only exercise the voting power under instructions given in writing, or has appropriate mechanisms in place for ensuring that individual portfolio management services are conducted independently of any other services.86