2.5.1. Application

This section applies, subject to MAR 2.5.4, to:

• (a) a Reporting Entity; and
• (b) a Related Party of such a Reporting Entity.

2.5.2. Definitions

In this section, unless otherwise provided:

1. (a) a Person is a Related Party of a Reporting Entity if that Person:
2. (i) is, or was within the 12 months before the date of the Related Party Transaction:

(A) a Director or a Person involved in the senior management of the Reporting Entity or a member of its Group;

(B) an Associate of a Person referred to in (a)(i)(A); or

1. (ii) owns, or has owned within 12 months before the date of the Related Party Transaction, voting Securities carrying more than 5% of the voting rights attaching to all the voting Securities of either the Reporting Entity or a member of its Group; or
2. (iii) is, or was within the 12 months before the date of the Related Party Transaction, a Person exercising or having the ability to exercise significant influence over the Reporting Entity or an Associate of such a Person.
3. (b) a transaction is a Related Party Transaction if it is a transaction:
4. (i) between a Reporting Entity and a Related Party; or
5. (ii) under which the Reporting Entity invests in another Undertaking or asset, or provides financial assistance to another Undertaking, in which a Related Party also has a financial interest; or
6. (iii) between the Reporting Entity and any other Person the purpose or effect of which is to benefit a Related Party; or
7. (iv) of the kind referred to in (i) – (iii) and is between a Subsidiary of a Reporting Entity and a Related Party of the Reporting Entity.

Guidance:

Definitions Any transaction between a Subsidiary of a Reporting Entity and a Related Party is included within the definition of a Related Party Transaction. This is because a Related Party may, through the Reporting Entity, be able to influence terms which are more favourable to the Related Party when transacting with the subsidiary. Such transactions could be detrimental to the interests of the Reporting Entity.

2.5.3. Related party transaction procedures

If a Reporting Entity enters into a Related Party Transaction or a series of Related Party Transactions in any 12-month period and the value of such transaction(s) is greater than 5% of value of the net assets of the Reporting Entity as stated in its most recent financial reports, the Reporting Entity must, no later than the time when the terms of the transaction or arrangement are agreed, make public disclosure which sets out:

1. (a)    the nature of the Related Party relationship;
2. (b)    the name of the Related Party;
3. (c)    the date and the value of the transaction or arrangement; and
4. (d)    any other information necessary to assess whether the transaction or arrangement is fair and reasonable from the perspective of the Reporting Entity and of the stakeholders who are not a Related Party, including minority shareholders and creditors.
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2.5.4. Exemptions

The requirements in this section do not apply to a transaction referred to in MAR 2.5.2(b):

• (a) where the transaction is made in the ordinary course of business and on commercial terms no less favourable than those of an arm’s length transaction with an unrelated party; or
• (b) where it, or any series of transactions with the same Related Party in any 12-month period, does not exceed 0.25% of the value of the net assets of the Reporting Entity as stated in its most recent financial reports; or
• (c) where it is made in accordance with the terms of an Employee Share Scheme or other Employee incentive scheme approved by the Board of the Reporting Entity; or
• (d) where it involves the issue of new Securities for cash or pursuant to the exercise of conversion or subscription rights attaching to Securities issued to existing Shareholders where the Securities are traded on an Authorised Investment Exchange.