parent undertaking

(in accordance with section 420 of the Act (Parent and subsidiary undertaking) and section 258 of the Companies Act 1985 (Parent and subsidiary undertakings)):

1. (a) (in relation to whether an undertaking , other than an incorporated friendly society , is a parent undertaking and except for the purposes of PRU 8.4 (Cross sector groups), PRU 8.5 (Third country groups), PRU 8 Ann 1R G (Capital adequacy calculations for financial conglomerates) and PRU 8 Ann 2R (Prudential rules for third country groups)) an undertaking which has the following relationship to another undertaking ("S"):19
   1. (i) it holds a majority of the voting rights in S; or
   2. (ii) it is a member of S and has the right to appoint or remove a majority of its board of directors; or
   3. (iii) it has the right to exercise a dominant influence over S through:
      1. (A) provisions contained in S's memorandum or articles; or
      2. (B) a control contract; or
   4. (iv) it is a member of S and controls alone, under an agreement with other shareholders or members, a majority of the voting rights in S; or
   5. (v)28
      1. (A) it has the power to exercise, or actually exercises, dominant influence or control 28over S; or
      2. (B) it and S are managed on a unified basis; or
   6. (vi) it is a parent undertaking of a parent undertaking of S; or
   7. (vii) (except in REC and LLD) he is an individual and would be a parent undertaking if he were an undertaking; or
   8. (viii) (except in REC and LLD) it is incorporated in or formed under the law of another EEA State and is a parent undertaking within the meaning of any rule of law in that State for purposes connected with implementation of the Seventh Company Law Directive;
   in relation to (ii) and (iv); the undertaking will be treated as a member of S if any of its subsidiary undertakings is a member of S, or if any shares in S are held by a person acting on behalf of the undertaking or any of its subsidiary undertakings; the provisions of Schedule 10A to the Companies Act 1985 (Parent and subsidiary undertakings: supplementary provisions) explain the expressions used in and supplement paragraphs (i) to (vi);
2. (b) (in relation to whether an incorporated friendly society is a parent undertaking and except for the purposes of PRU 8.4 (Cross sector groups), PRU 8.5 (Third country groups), PRU 8 Ann 1R G (Capital adequacy calculations for financial conglomerates) and PRU 8 Ann 2R (Prudential rules for third country groups)) an incorporated friendly society which has the following relationship to a body corporate ("S"):19
   1. (i) it holds a majority of the voting rights in S; or
   2. (ii) it is a member of S and has the right to appoint or remove a majority of S's board of directors; or
   3. (iii) it is a member of S and controls alone, under an agreement with other shareholders or members, a majority of the voting rights in S; or
   4. (iv) it is the parent undertaking of a body corporate which has the relationship in (i), (ii) or (iii) to S.
3. (c) (for the purposes of PRU 8.4 (Cross sector groups), PRU 8.5 (Third country groups), PRU 8 Ann 1R G (Capital adequacy calculations for financial conglomerates) and PRU 8 Ann 2R (Prudential rules for third country groups) and in relation to whether an undertaking is a parent undertaking) an undertaking which has the following relationship to another undertaking ("S"): 19
   1. (i) a relationship described in (a) other than (a)(vii); or 19
   2. (ii) it effectively exercises a dominant influence over S19
   and so that (ii) applies also for the purpose of PRU 8.1 (Group risk systems and controls requirement).5219