Related Party Transaction Risk
Application provision
1.1 This Part applies to:
- (1) a UK bank;
- (2) a building society; and
- (3) an overseas firm that:
- (a) is not an incoming firm; and
- (b) has a Part 4A permission that includes permission to carry out accepting deposits.
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Application and Definitions
1.1
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This Part applies to:
- (1) a UK bank;
- (2) a building society; and
- (3) an overseas firm that:
- (a) is not an incoming firm; and
- (b) has a Part 4A permission that includes permission to carry out accepting deposits.
1.2
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- (a) A’s spouse or civil partner;
- (b) any other person with whom A lives as partner in an enduring family relationship;
- (c) A’s children or step-children;
- (d) any children or step-children of a person within (b) (and who are not children or step-children of A) who live with A and have not attained the age of 18; and
- (e) A’s parents.
- (a) any person that it controls;
- (b) its affiliated companies;
- (c) its and its affiliated companies’ controllers;
- (d) its and its affiliated companies’ directors;
- (e) its and its affiliated companies’ senior management;
- (f) its and its affiliated companies’ key employees;
- (g) close family members of any natural person listed in (a) to (f) above;
- (h) direct and related interests of any person listed in (a) to (g) above; and
- (i) any person that would fall into (a) to (h) above after the relevant transaction has occurred.
- (a) any arrangement or circumstance that gives rise to or varies an on-balance sheet or off-balance sheet asset or liability (whether contingent or otherwise);
- (b) dealings such as service contracts, as set acquisitions and disposals, construction contracts, lease agreements, derivative transactions, borrowings and write-offs.
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Related Party Transaction Risk
2.1
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2.2
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2.3
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2.4
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- (1) prevent a related party from taking part in the firm’s decision making process in relation to any transactions with that related party;
- (2) set a materiality threshold above which transactions with related parties receive prior approval from the firm’s management body;
- (3) ensure that the firm records and monitors the details and amounts of any related party transactions using an independent credit review or audit process; and
- (4) only permit exceptions to those policies and procedures if reported to the firm’s senior management or management body as appropriate.
2.5
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