Ruling on Definition of Associated Person

NZX Regulation Decision
Stride Investment Management Limited (“SPG”) and
Investore Property Limited (“IPL”)
Application for a Ruling on the Definition of “Associated
Person”






28 May 2020

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Background
1. NZX has updated the NZX Listing Rules (
Rule
), effective from 1 January 2020. This is the
redocumentation of the waiver issued by NZX Regulation (
NZXR
) on 17 August 2017.
2. The information on which this decision is based is set out in Appendix One. This waiver and
ruling will not apply if that information is not or ceases to be full and accurate in all material
respects.

3. The Rules to which this decision relates are set out in Appendix Two.
4. Capitalised terms which have not been defined in this decision have the meanings given to
them in the Rules.

Ruling on the Definition of “Associated Person”
Decision
4. On the basis that the information provided by SPG is complete and accurate in all material
respects, NZXR rules that that for the purposes of the definition of “Associated Person” in the
Rules, IPL is not an “Associated Person” of SIML and accordingly, IPL is not a “Related Party”
of SIML.
Reasons
5. In coming to the decision to provide the ruling set out in paragraph 4 above, NZXR has
considered that the policy behind the Associated Person and Related Party rule is to regulate
the controlling of relationships and regulate transactions where a Related Party to a Material
Transaction may gain favourable terms due to its relationship with the Issuer. The
interpretation that IPL is a "Related Party" of SIML due to being an "Associated Person" of
SIML is not consistent with the intention behind the definition of “Associate Person” and
“Related Party” as IPL is unable to exercise any powers in respect of SIML. But for the
Management Agreement, IPL would not otherwise be an "Associated Person" (or a "Related
Party") of SIML.

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Appendix One
1. Investore Property Limited (
IPL
) is a Listed Issuer with ordinary shares quoted on the NZX
Main Board (
NZSX
)
2. Stride Investment Management Limited (
SIML
) is also a Listed Issuer with shares Quoted
on the NZSX. SIML is part of the Stride Property Group (
SPG
) with Stride Property Limited
(
Stride
). SIML and Stride's shares are stapled together and trade as a single economic
unit on the NZSX under the ticker "SPG".
3. IPL is party to a management agreement (
Management

Agreement
) with SIML, under
which SIML manages IPL’s property portfolio.
4. Under the current terms of the Management Agreement, SIML may appoint two directors
to the board of IPL therefore, IPL and SIML share two common directors (
Common
Directors
). Where SIML has appointed two directors to the IPL Board, the remaining
directors are required to be:
a. “Independent Directors” as defined in the Listing Rules
b. independent of SIML, as required by IPL’s constitution.
(Together, the
Board Structure
)
5. But for paragraph (e) of the definition of “Related Party”, the relationship created by the
Common Directors would otherwise mean IPL is a Related Party of SIML under the Rules.
This is because not more than one third of the SIML Board are also Directors of IPL and
no Director of SIML has a material economic interest in in IPL.
6. IPL is a Related Party of SIML because it is an "Associated Person" of SIML under
paragraph (a) of the definition of “Associated Persons”, which states that a person (IPL)
is associated with another person (SIML) if IPL is able to exert a substantial degree of
influence over the activities of SIML (or vice versa). As manager of IPL, SIML brings
opportunities / proposals to the Board. While the Board makes all of the material decisions,
day-to-day operations are undertaken by SIML as manager and SIML has influence in
overall activities of IPL in what it puts to the Board. Because of the "vice versa" language,
IPL is also "Associated" with SIML under this definition.

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Appendix Two
Associated Person a person (A) is associated with, or an Associated
Person of, another person (B) if:
(a) A is able, directly or indirectly, to exert a
substantial degree of influence over the activities
of B (or vice versa),
(b) B is a body corporate and A has the power,
directly or indirectly, to exercise, or control the
exercise of, more than 50% of the Votes
attaching to the Financial Products of B (or vice
versa),
(c) A and B are Relatives or Related Bodies
Corporate,
(d) A and B are partners to whom the Partnership Act
1908 applies,
(e) A is a director or Senior Manager of B (or vice
versa), or
(f) A and B are acting jointly or in concert,
except that:
(g) A is not an Associated Person of B merely
because:
i. A acts as a professional or business adviser
to B, without a personal financial interest in
the outcome of that advice,
ii. A’s ordinary business includes dealing in
Financial Products on behalf of others and A
is acting in accordance with the specific
instructions of B,
iii. A acts as a proxy or representative of B for
the purposes of a meeting of holders of
Financial Products, or
iv. there is another person with which A and B
are both associated,
(h) persons will not be Associated Persons if NZX
makes a Ruling that they are not Associated
Persons.

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Related Party means a person who, at the time of a Material
Transaction, or at any time within the previous six
months, was:
(a) a Director or Senior Manager of the Issuer or any
of its Subsidiaries,
(b) the holder of a Relevant Interest in 10% or more
of a Class of Equity Securities of the Issuer
carrying Votes,
(c) an Associated Person of the Issuer or any of the
persons referred to in (a) or (b), except where the
person becomes an Associated Person as a
consequence of the Material Transaction, or
(d) a person in respect of whom there are
arrangements which are intended to result in that
person becoming, or expected to become, a
person described in (a), (b), or (c) other than as a
consequence of the Material Transaction,
but a person is not a Related Party of an Issuer if:
(e) the only reason why that person would otherwise
be a Related Party of the Issuer is that a Director
or Senior Manager of the Issuer is also a Director
of that person, so long as:
(i) the proportion of Directors of the Issuer who
are also Directors of that person is one third
or less, and
(ii) no Director or Senior Manager of the Issuer
has a material direct or indirect economic
interest in that person, other than receiving
reasonable Director’s fees or executive
remuneration, or
(f) that person is a Subsidiary or incorporated joint
venture of, or unincorporated joint venture
participant with, the Issuer and:
(i) no Related Party of the Issuer has or
intends to obtain, other than through the
Issuer itself, a material direct or indirect
economic interest in that Subsidiary or joint
venture other than receiving reasonable
Director’s fees or executive remuneration,
and
(ii) the Issuer has at least 50% of the Votes in
or is entitled to at least 50% of the dividends

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declared or paid by the Subsidiary or
incorporated joint venture or is entitled to at
least one half of the income or profits, and
the assets, of the unincorporated joint
venture (if and when distributed).