Affiliated Person:
Noun
1. A person who is connected or associated with a particular organisation, group, or entity, typically through membership, employment, or a formal relationship.
2. In the context of financial regulations, an individual who has a close relationship with a broker-dealer, investment adviser, or other financial institution may have access to non-public information or influence over the institution’s activities.
3. A person who is related to or connected with another person through family ties, marriage, or a close personal relationship.
Example sentences:
John is an affiliated member of the company, serving as a board member and shareholder.
According to the Securities and Exchange Commission, an affiliated person must disclose any potential conflicts of interest.
Sarah is an affiliated member of the organisation, as she is the sister of the CEO.
An affiliated person refers to an individual or entity that has a close relationship with a specified person or organisation. This relationship can be based on various factors, such as ownership, control, or common management. In the legal context, the term “affiliated person” is often used in securities laws and regulations to identify individuals or entities that may have a potential conflict of interest with a particular organisation.
Under securities laws, an affiliated person may include directors, officers, partners, or employees of a company, as well as any person or entity that directly or indirectly controls, is controlled by, or is under common control with the company. Affiliated persons are subject to certain disclosure requirements and restrictions to ensure transparency and protect the interests of investors.
The identification of affiliated persons is crucial in determining potential conflicts of interest, as these individuals or entities may have access to non-public information or may engage in transactions that could benefit themselves at the expense of other shareholders or investors. Therefore, securities laws often require companies to disclose any material transactions or relationships involving affiliated persons to ensure fair and equal treatment of all investors.
In summary, an affiliated person is an individual or entity closely associated with a specified person or organisation, particularly in the context of securities laws. They are subject to disclosure requirements and restrictions to prevent conflicts of interest and protect the interests of investors.
1. What is an affiliated person?
An affiliated person is an individual or entity that has a close relationship with a company, such as a director, officer, or significant shareholder.
2. What are the responsibilities of an affiliated person?
The responsibilities of an affiliated person may include disclosing their relationship with the company, abstaining from certain transactions, and avoiding conflicts of interest.
3. How does one become an affiliated person?
An individual becomes an affiliated person through their relationship with a company, such as being appointed as a director or officer, or acquiring a significant ownership stake.
4. What is the difference between an affiliated person and a related party?
An affiliated person is typically someone with a formal role or relationship with the company, while a related party can include individuals or entities with a more informal or indirect connection.
5. What are the potential conflicts of interest for an affiliated person?
Potential conflicts of interest for an affiliated person may arise when they have personal or financial interests that conflict with the best interests of the company or its shareholders.
6. How are conflicts of interest managed for affiliated persons?
Conflicts of interest for affiliated persons are typically managed through disclosure, recusal from certain decisions or transactions, and adherence to ethical guidelines and corporate governance policies.
7. What are the consequences of not disclosing a relationship as an affiliated person?
Failure to disclose a relationship as an affiliated person can result in legal and regulatory consequences, as well as damage to the individual’s reputation and the company’s integrity.
8. Can an affiliated person have a financial interest in the company?
An affiliated person may have a financial interest in the company, but they are typically required to disclose and manage any potential conflicts of interest related to their financial stake.
9. How does the status of an affiliated person impact their ability to trade securities of the company?
Affiliated persons are often subject to restrictions on trading securities of the company, particularly if they have access to material nonpublic information or if their transactions could be perceived as insider trading.
10. What are the reporting requirements for affiliated persons?
Affiliated persons are often required to report their relationships with the company, as well as any transactions or potential conflicts of interest, to regulatory authorities and the company’s board of directors.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 11th April 2024.
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