Persons who are considered to be connected with the company or its directors (www.practicallaw.com/A34876) or its persons discharging managerial responsibilities (PDMRs) (www.practicallaw.com/4-200-9271):
Certain prohibitions in Part 10 of the Companies Act 2006 place restrictions on transactions with persons connected to directors. Under section 252 of the Companies Act 2006, a person is connected with a director if they are a member of the director's family (that is, the director’s spouse, civil partner, any person with whom the director lives as a partner in an enduring family relationship, a child or stepchild of the director, a child or step-child of a director’s partner (if living with the director and under the age of 18), or the director’s parents). A company is connected with a director if the director (and persons connected with him) is interested in 20% or more of the equity share capital of the company, or can exercise more than 20% of the voting power at a general meeting of the company. There are similar provisions which serve to connect persons to a director in relation to trusts (www.practicallaw.com/A37116) set up for the benefit of that director or his family, and in relation to partners of a director.
The Disclosure Rules (www.practicallaw.com/2-200-9187) and the Listing Rules (www.practicallaw.com/7-107-6774) contain certain requirements in relation to transactions by persons connected with PDMRs within the issuer. Under section 96B(2) of and Schedule 11B to the Financial Services and Markets Act 2000 (www.practicallaw.com/7-107-5760) (as inserted by The Financial Services and Markets Act 2000 (Amendment) Regulations 2009 (www.practicallaw.com/8-500-1552) (SI 2009/2461) from 1 October 2009), a person is connected with a PDMR within an issuer if that person is:
the PDMR's spouse, civil partner, or child or step-child under 18 years;
a relative (not defined) of the PDMR who at the date of the transaction in question has shared the same household as that PDMR for at least 12 months;
a body corporate with which the PDMR is "associated" (that is, a body corporate in which the PDMR, or any person connected with him, is a director or other senior executive who has the power to make management decisions affecting the future development and business prospects of that body corporate; or a body corporate where the PDMR and persons connected with him together control, or can exercise, more than 20% of the voting power in general meeting (excluding votes attached to treasury shares) or are interested in at least 20% (in nominal value) of the shares (excluding treasury shares) comprised in the equity share capital);
the trustee of a trust (excluding an employee's share scheme or a pension scheme) of which the beneficiaries or potential beneficiaries include the PDMR, his spouse or any of his children or step-children aged under 18 years, or a body corporate with which he is associated;
a partner of the PDMR, or a partner of any person who is connected with the PDMR;
a firm that is a legal person in which the PDMR or one of his connected persons is a partner, or in which a partner is a firm in which the PDMR or one of his connected persons is a partner.
The glossary to the FCA Handbook (www.practicallaw.com/5-107-6609) sets out the full definition of this term for the purposes of the FCA Handbook. When considering this term in the context of financial services, reference should be made to the FCA Handbook glossary definition of connected person.
Under the Insolvency Act 1986, certain transactions between the company and connected persons may be set aside. For the purposes of this Act, persons connected with the company are directors, shadow directors (www.practicallaw.com/A36929), associates (www.practicallaw.com/A35864) of such directors or shadow directors and associates of the company (section 249, Insolvency Act 1986).