LR 11 Annex 1 Transactions to which related party transaction rules do not apply

LR 11 Annex 1.1R

Small transaction

1

A transaction or arrangement where each of the applicable percentage ratios is equal to or less than 0.25%.3

1Transaction agreed before person became a related party

11A

A transaction the terms of which:

1(1)

were agreed at a time when no party to the transaction or person who was to receive the benefit of the transaction was a related party; and

1(2)

have not been amended, or required the exercise of discretion by the listed company under those terms, since the party or person become a related party.

Issue of new securities and sale of treasury shares

2

A transaction that consists of:

(1)

the take up by a related party of new securities or treasury shares under its entitlement in a pre-emptive offering;

(2)

an issue of new securities made under the exercise of conversion or subscription rights attaching to a listed class of securities.1

1

1 1

Employees' share schemes and long-term incentive schemes

3

The:

(1)

receipt of any asset (including cash or securities of the listed company or any of its subsidiary undertakings) by a director of the listed company, its parent undertaking or any of its subsidiary undertakings; or

(2)

grant of an option or other right to a director of the listed company, its parent undertaking, or any of its subsidiary undertakings to acquire (whether or not for consideration) any asset (including cash or new or existing securities of the listed company or any of its subsidiary undertakings); or

(3)

provision of a gift or loan to the trustees of an employee benefit trust to finance the provision of assets as referred to in (1) or (2);

in accordance with the terms of an employees' share scheme or a long-term incentive scheme.

Credit

4

A grant of credit (including the lending of money or the guaranteeing of a loan):

(1)

to the related party on normal commercial terms;

(2)

to a director for an amount and on terms no more favourable than those offered to employees of the group generally; or

(3)

by the related party on normal commercial terms and on an unsecured basis.

Directors' indemnities and loans1

5

(1)

A transaction that consists of:

(a)

granting an indemnity to a director of the listed company (or any of its subsidiary undertakings) if the terms of the indemnity are in accordance with those specifically permitted to be given to a director under the Companies Act 2006;1

1

(b)

maintaining a contract of insurance if the insurance is in accordance with that specifically permitted to be maintained for a director under that the Companies Act 20061(whether for a director of the listed company or for a director of any of its subsidiary undertakings); or1

11

1(c)

a loan or assistance 2to a director by a listed company or any of its subsidiary undertakings if the terms of the loan or assistance 2are in accordance with those specifically permitted to be given to a director under section 204, 205 or 2064 of the Companies Act 2006.

4

(2)

Paragraph (1) applies to a listed company that is not subject to the Companies Act 20061if the terms of the indemnity or contract of insurance are in accordance with those that would be specifically permitted under that Act (if it applied).

1

Underwriting

6

(1)

The underwriting by a related party of all or part of an issue of securities by the listed company (or any of its subsidiary undertakings) if the consideration to be paid by the listed company (or any of its subsidiary undertakings) for the underwriting:

(a)

is no more than the usual commercial underwriting consideration; and

(b)

is the same as that to be paid to the other underwriters (if any).

(2)

Paragraph (1) does not apply to the extent that a related party is underwriting securities which it is entitled to take up under an issue of securities. 1

7

[deleted]1

Joint investment arrangements

8

(1)

An arrangement where a listed company, or any of its subsidiary undertakings, and a related party each invests in, or provides finance to, another undertaking or asset if the following conditions are satisfied:

(a)

the amount invested, or provided, by the related party is not more than 25% of the amount invested, or provided, by the listed company or its subsidiary undertaking (as the case may be) and the listed company has advised the FCA in writing that this condition has been met; and

(b)

a sponsor5 has provided a written opinion to the FCA stating that the terms and circumstances of the investment or provision of finance by the listed company or its subsidiary undertakings (as the case may be) are no less favourable than those applying to the investment or provision of finance by the related party.

5

(2)

The advice in paragraph (1)(a) and the opinion in paragraph (1)(b) must be provided before the investment is made or the finance is provided.

Insignificant subsidiary undertaking

9

(1)

A transaction or arrangement where each of the conditions in paragraphs (2) to (6) (as far as applicable) is satisfied.

(2)

The party to the transaction or arrangement is only a related party because:

(a)

it is (or was within the 12 months before the date of the transaction or arrangement) a substantial shareholder or its associate; or

(b)

it is a person who is (or was within the 12 months before the date of the transaction or arrangement) a director or shadow director or his associate;

of a subsidiary undertaking or subsidiary undertakings of the listed company that has, or if there is more than one subsidiary undertaking that have in aggregate, contributed less than 10% of the profits of, and represented less than 10% of the assets of, the listed company for the relevant period.

(3)

The subsidiary undertaking or each of the subsidiary undertakings (as the case may be) have been in the listed company's group for one full financial6 year or more.

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(4)

In paragraph (2), "relevant period" means:

(a)

if the subsidiary undertaking or each of the subsidiary undertakings (as the case may be) has been consolidated in the listed company's group for one full financial year or more but less than three full financial years, each of the full6 financial years before the date of the transaction or arrangement for which accounts have been published; and

6

(b)

if the subsidiary undertaking or any of the subsidiary undertakings (as the case may be) has been consolidated in the listed company's group for three full financial year or more, each of the three full6 financial years before the date of the transaction or arrangement for which accounts have been published.

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(5)

If the subsidiary undertaking or any of the subsidiary undertakings (as the case may be) are themselves party to the transaction or arrangement or if securities in the subsidiary undertaking or any of the subsidiary undertakings or their assets are the subject of the transaction or arrangement, then the ratio of consideration to market capitalisation of the listed company is less than 10%.

(6)

In this rule, the figures to be used to calculate profits, assets and consideration to market capitalisation are the same as those used to classify profits, assets and consideration to market capitalisation in LR 10 Annex 1 (as modified or added to by LR 10.7 where applicable). 1