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Term Definition Legal instruments

parent undertaking

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

(in the Solvency II Firms Sector of the PRA Rulebook) means, in accordance with section 420 of FSMA (Parent and subsidiary undertaking) and section 1162 of the Companies Act 2006 (Parent and subsidiary undertakings), an undertaking which has the following relationship to another undertaking ("S"):

(1) it holds a majority of the voting rights in S; or

(2) it is a member of S and has the right to appoint or remove a majority of its board of directors; or

(3) it has the right to exercise a dominant influence over S through:

(a) provisions contained in S's memorandum or articles; or

(b) a control contract; or

(4) 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) (a) it has the power to exercise, or actually exercises, dominant influence or control over S; or

      (b) it and S are managed on a unified basis; or

(6) it is a parent undertaking of a parent undertaking of S; or

(7) where, in the opinion of the PRA, it effectively exercises a dominant influence over S;

      and:

(8) in relation to (2) and (4), 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;

(9) the provisions of Schedule 7 to the Companies Act 2006 (Parent and subsidiary undertakings: supplementary provisions) explain the expressions used in and supplement paragraphs (1) to (6).

Additional Notes

[Note: Art. 212(2) of the Solvency II Directive]