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  • GR-6 Close Links

    • GR-6.1 Key Provisions

      • GR-6.1.1

        Condition 3 of the CBB's licensing conditions specifies, amongst other things, that investment firm licensees must satisfy the CBB that their close links do not prevent the effective supervision of the licensee and otherwise pose no undue risks to the licensee. (See Paragraph AU-2.3.1).

        Amended: July 2007

      • GR-6.1.2

        Applicants for an investment firm license must provide details of their close links, as provided for under Form 1 (Application for a License). (See Paragraph AU-5.1.1).

      • GR-6.1.3

        Investment firm licensees must submit to the CBB, within 3 months of their financial year-end, a report on their close links. The report must identify all undertakings closely linked to the licensee, as defined in Section GR-6.2.

        Amended: July 2007

      • GR-6.1.4

        Investment firm licensees may satisfy the requirement in Paragraph GR-6.1.3 by submitting a corporate structure chart, identifying all undertakings closely linked to the licensee.

        Amended: July 2007

      • GR-6.1.5

        Investment firm licensees must provide information on undertakings with which they are closely linked, as requested by the CBB.

        Amended: July 2007

    • GR-6.2 Definition of Close Links

      • GR-6.2.1

        An investment firm licensee ('L') has close links with another undertaking ('U'), if:

        (a) U is a parent undertaking of L;
        (b) U is a subsidiary undertaking of L;
        (c) U is a subsidiary undertaking of a parent undertaking of L;
        (d) U, or any other subsidiary undertaking of its parent, owns or controls 20% or more of the voting rights or capital of L; or
        (e) L, any of its parent or subsidiary undertakings, or any of the subsidiary undertakings of its parent, owns or controls 20% or more of the voting rights or capital of U.
        Amended: July 2007

    • GR-6.3 Assessment Criteria

      • GR-6.3.1

        In assessing whether an investment firm licensee's close links may prevent the effective supervision of the firm, or otherwise poses no undue risks to the investment firm licensee, the CBB takes into account the following:

        (a) Whether the CBB will receive adequate information from the investment firm licensee, and those with whom the licensee has close links, to enable it to determine whether the licensee is complying with CBB requirements;
        (b) The structure and geographical spread of the licensee, its group and other undertakings with which it has close links, and whether this might hinder the provision of adequate and reliable flows of information to the CBB, for instance because of operations in territories which restrict the free flow of information for supervisory purposes;
        (c) In the case of an overseas investment firm licensee, whether the investment firm licensee and its group will be subject to supervision on a consolidated basis (for example, if a financial resources requirement is determined for the group as a whole); and
        (d) Whether it is possible to assess with confidence the overall financial position of the group at any particular time, and whether there are factors that might hinder this, such as group members having different financial year ends or auditors, or the corporate structure being unnecessarily complex and opaque.
        Amended: July 2007

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