PIB A4.11.7

(1) For Concentration Risk purposes, and in relation to a Person, a Connected Counterparty means another Person to whom the first Person has an Exposure and who fulfils one of the following conditions:

(a) he is Connected to the first Person;
(b) he is an Associate of the first Person;
(c) the same Persons significantly influence the Governing Body or senior management of each of them;
(d) one of those Persons has an Exposure to the other that was not incurred for the clear commercial advantage of both of them and which is not on arm's length terms; or
(e) one of those Persons:
(i) has influence over the appointment or dismissal of the Board or senior management of the other party;
(ii) is entitled to exercise, or controls the exercise of 50% or more of the voting rights in the other party including through voting agreements; or
(iii) has effective control over the other party under the criteria adopted by the International Financial Reporting Standards.

(2) A Person is not to be treated as a Connected Counterparty under (1), where an Authorised Firm can satisfy the DFSA that effective governance and controls are in place to mitigate risks resulting from effective control of one Person by the other and the DFSA has, by notice in writing, specified that they are not to be so treated.

Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
[Amended] DFSA RMI293/2021 (Made 24th February 2021). [VER38/04-21]