Part 1: Call-in for national security Chapter 2: Interpretation Section 10: Holding and acquiring interests and rights: supplementary and Schedule 1: Trigger events: holding of interests and rights
Section 10 introduces Schedule 1 which provides for particular cases in which a person is to be treated as holding an interest or a right for the purposes of the Act. Subsection (2) provides for the occurrence of circumstances set out in Schedule 1 to be treated as acquisitions for the purposes of the Act.
	Schedule 1 sets out further details as to how interests and rights are deemed to be held and therefore provides further explanation of the mechanisms through which control of entities and assets may be acquired.
	Paragraph 2 of Schedule 1 provides that parties acting through joint arrangements are treated as holding the collective interests and rights that each party of that arrangement holds individually.
	Paragraph 3 provides for interests or rights held indirectly to be in scope of the regime. This means that a person holding an interest or right in a parent entity of an entity or a chain of entities is, depending on the circumstances in sub-paragraph (2)(a) or (2)(b) being satisfied, treated as holding the interest or right in the entity at the bottom of the chain. If an entity is part of a chain of entities, a person will exercise the right indirectly if each entity in the chain has a majority stake in the entity immediately below it in the chain, and the last entity in the chain has the right in question (sub-paragraph (2)(b)). Sub-paragraph (3) defines "majority stake" by reference to a majority of voting rights, dominant influence or control, and the right to appoint or remove a majority of the board of directors.
Example A: Indirect holdings
Party A acquires 100% of votes and shares of Company B.
Company B owns 51% of votes and shares of a subsidiary, Company C.
As Company B holds a majority stake in Company C, Party A has acquired indirect control over Company C through the acquisition of Company B.
	Paragraph 5 provides that a person who controls a right, as established in paragraph 5(2), is deemed to hold that right. This means that the controller of the right - and not the holder unless they are also the controller - will be considered to hold the right. Paragraph 5(2) sets out that control can be held through an arrangement between a person and others. The definition of an arrangement in paragraph 12 provides that there needs to be a degree of stability about it.
	Paragraphs 6 and 7 provide for rights that are exercisable only in certain circumstances and rights attached to shares held by way of security respectively and replicate corresponding provisions in Schedule 1A to the Companies Act 2006.
	Paragraphs 8-10 provide for the circumstances in which two or more persons are deemed to be connected persons by virtue of their relationship to one another. Each connected person is deemed to be holding the combined interests or rights of both or all of the connected persons.
	Paragraph 11 provides for the circumstances in which two or more persons are deemed to be acting with common purpose and are therefore each deemed to be holding the collective interests and rights that each person holds individually.
Example B: Common purpose
Party A owns 20% of votes and shares of Company D.
Party B owns 20% of votes and shares of Company D.
Party C acquires 20% of votes and shares of Company D.
Parties A, B and C co-ordinate the use of their votes, in practice meaning that they collectively use their votes to attempt to achieve a shared aim. In such circumstances, Party C’s acquisition would be a trigger event through which Parties A, B and C would be deemed to have each acquired 60% of the votes and shares in Company D.