* How do I identify a relationship of Control between an Applicant and a possible Affiliate?

In examining the definitions for Control, Controlled, or Controlling, Affiliates can be identified clearly within an entity’s stock certificate summary report, organizing documents, or governance documents (including its bylaws or similar, Articles of Incorporation or similar, etc.). 

Some common examples of Control outside of a stock ownership situation include:

• Governing or managing board:
  • Control can exist at the governing or managing board level.
    • If an Affiliate appoints, nominates or occupies a majority or substantial minority of the seats on an entity’s governing or managing board, it indicates that an Affiliate has Control over the relevant entity via its leadership board.
• General operations, business plan and budget:
  • Control can exist if an Affiliate plays an active role in an entity’s operations or in establishing and/or implementing its business plan or overall budget.
    • For example: if an Affiliate is required to approve aspects such as the entity’s operating plan, business plan or overall budget; or if an Affiliate plays an active role in determining what activities an entity will undertake or in an entity’s general decisions about its spending or use of funds, this could indicate a form of Control.
  • A passive role in an entity’s operations such as funding-related compliance requirements or a funding-related compliance review process is NOT indicative of a Controlling relationship. Additionally, a targeted role in an entity’s operations over the budget for a specific program, project, or limited set of funds is NOT indicative of a Controlling relationship.
• Financing decisions:
  • Control can exist if an Affiliate plays an active role in either:
    • Deciding how or where Financial Products will be deployed or has veto power over some of an entity’s underwriting or financing decisions; or
    • Appointing, nominating or occupying a majority or substantial minority of certain board seats on an entity’s loan/investment committee.
  • A passive role in an entity’s financing decisions via something like funding-related compliance requirements or a funding-related compliance review process is NOT indicative of a Controlling relationship.
• Staffing:
  • If an entity’s staffing is provided by an Affiliate, either through contract or fact, that may constitute a Controlling influence over the management of that entity.