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Appendix 3 - Owners' and Directors' Test

Appendix 3 - Owners' & Directors' Test

Introduction

The intention behind this Appendix 3 is to protect the image and integrity of The League and its competitions, the well-being of the Clubs, and the interests of all of the stakeholders in those Clubs, by preventing anyone who is subject to a 'Disqualifying Condition' being involved in or influencing the management or administration of a Club.

More specifically, Appendix 3:

(a) prohibits a person who is subject to a Disqualifying Condition from becoming a 'Relevant Person' for any Club for so long as the Disqualifying Condition subsists;

(b) requires a person who was already a Relevant Person before the Disqualifying Condition arose to stop being a Relevant Person for so long as the Disqualifying Condition subsists; and

(c) requires each Club not to permit any person who is subject to a Disqualifying Condition either become a Relevant Person or (if he was already a Relevant Person before the Disqualifying Condition arose) to continue to be a Relevant Person for the Club, for so long as the Disqualifying Condition subsists.

Appendix 3 also imposes reporting requirements on Clubs and on individuals who are or propose to be Relevant Persons of Clubs, to facilitate The League's policing and enforcement of these restrictions. For the avoidance of doubt individuals applying under this test will become subject to the League’s Regulations at the point of submission of the Declaration.

1 Interpretation

1.1 In this Appendix the following words shall have the following meanings:

‘Authorised Signatory’ means any person duly authorised by a resolution of its directors to sign the Declaration on the Club’s behalf.

‘Bankruptcy Order’ means an order adjudging an individual bankrupt.

‘Bankruptcy Restriction Order’ and ‘Interim Bankruptcy Restriction Order’ mean orders made under the provisions of Schedule 4A of the Insolvency Act 1986.

'Club' means any Member Club and, for the purposes of this Appendix 3 only, includes any Associated Undertaking, Fellow Subsidiary Undertaking, Group Undertaking, Parent Undertaking or Subsidiary Undertaking of such Club.

‘Conviction’ means a formal finding made by a court of competent jurisdiction that a person is guilty beyond reasonable doubt of a criminal offence, whether that finding was made before or after these Rules came into effect, and whether or not that finding is considered to be final pending resolution of any appeal against that finding. The word ‘Convicted’ shall be construed accordingly.

'Declaration' means the Owners’ and Directors’ Declaration form prescribed by The League and published on The League’s document portal.

'Dishonest Act' means any act which could reasonably be considered to be dishonest.

'Disqualifying Condition' means all or any of the following:

Associations between clubs:

(a) either directly or indirectly being involved in, or having the power to determine or influence, the management or administration of another Club or Premier League Club unless a dispensation in respect of the same has been granted by the Board in accordance with Regulation 106;

(b) either directly or indirectly holding or acquiring any Significant Interest in a Club while at the same time either directly or indirectly holding any interest in any class of shares or securities of another Club unless a dispensation in respect of the same has been granted by the Board in accordance with Regulation 106;

Disciplinary matters:

(c) being subject to a suspension or ban or other form of disqualification:

(i) from involvement in the administration of a sport by a Sports Governing Body; or

(ii) by a professional body (including, by way of example and without limitation, The Law Society, Bar Council or the Institute of Chartered Accountants, equivalent bodies in any other jurisdiction,

whether directly (for example a sanction against the individual in particular) or indirectly (for example a direction to persons subject to the jurisdiction of the sanctioning body that they should not employ, contract with or otherwise engage or retain the services of the person in question);

(d) in relation to the assessment of their compliance with this Appendix 3 (and/or any similar or equivalent rules of the Premier League and/or Football Association) at any time, they were found to have:

(i) failed to provide all relevant information (including, without limitation, information relating to any other individual who would qualify as a Relevant Person but has not been disclosed, including where they are acting as a proxy, agent or nominee for another Person); or

(ii) provided false, misleading or inaccurate information

(e) being found to have breached (irrespective of any sentence actually imposed), or having admitted breaching (irrespective of whether disciplinary proceedings were brought or not) at any time any rules in force from time to time in relation to the prohibition on betting on football matches in England and Wales;

Criminal matters:

(f) having an Unspent Conviction by a court of competent jurisdiction in England and Wales in respect of any offence involving:

(i) a Dishonest Act;

(ii) corruption;

(iii) perverting the course of justice;

(iv) a serious breach of any requirement under the 1985 Act or 2006 Act;

(v) dishonestly receiving a programme broadcast from within the UK with intent to avoid payment under Section 297 of the Copyright, Designs and Patents Act 1988;

(vi) admitting spectators to watch a football match at unlicensed premises under Section 9 of the Football Spectators Act 1989;

(vii) ticket touting under Section 166 of the Criminal Justice and Public Order Act 1994;

(viii) any attempt or conspiracy to commit any of the above offences; or

(g) having an Unspent Conviction for a like offence to any of the above offences by a court of competent jurisdiction outside England and Wales;

(h) having an Unspent Conviction by a court of competent jurisdiction anywhere in the world (including any attempt and/or any conspiracy to commit the same) that results in a sentence of at least 12 months’ imprisonment but for the avoidance of doubt, not a suspended jail sentence unless that sentence is subsequently activated for a period of at least 12 months for whatever reason;

(i) being subject to a banning order in accordance with Schedule 1 of the Football Spectators Act 2000 (or any like sanction pursuant to similar provisions in any other jurisdiction);

(j) in the reasonable opinion of The League, has engaged in conduct outside the United Kingdom that would constitute an offence of the sort described in paragraph (f) of this definition if such conduct had taken place in the United Kingdom, whether or not such conduct resulted in a Conviction;

(k) being a Registered Offender (as defined in this Appendix 3);

Company disqualification matters:

(l) being subject to:

(i) a disqualification order as a director under the Company Directors Disqualification Act 1986;

(ii) the terms of an undertaking given to the Secretary of State under that Act; or

(iii) any like sanction pursuant to similar provisions in any other jurisdiction,

unless a Court of competent jurisdiction makes an order under that Act permitting an appointment as director of a Club;

Insolvency matters:

(m) being subject to:

(i) an Individual Voluntary Arrangement (in accordance with the provisions of Part VIII of the Insolvency Act) including any fast track voluntary arrangement;

(ii) a Bankruptcy Order, Interim Bankruptcy Restriction Order or a Bankruptcy Restriction Order;

(iii) a debt relief order (in accordance with the provisions of Part 7A of the Insolvency Act);

(iv) an administration order (in accordance with Part 6 of the County Courts Act 1984);

(v) an enforcement restriction order, in accordance with the provisions of Part 6A of the County Courts Act 1984; and

(vi) a debt management scheme or debt repayment plan, in accordance with the provisions of Chapter 4 of Part 5 of the Tribunals, Courts and Enforcement Act 2007,

or any arrangement or order in any other jurisdiction that has a substantially similar effect;

(n) being a Relevant Person of:

(i) at least two Football Clubs that have each been subject to or suffered unconnected Insolvency Events;

(ii) one Football Club that has been subject to or suffered two unconnected Insolvency Events,

on or after the 11th June 2004) in respect of each of which a sporting sanction was imposed under Regulation 12 (or any equivalent rule of any other league). For the purposes of this definition of Disqualifying Condition:

(A) a Person shall be deemed to have been a Relevant Person of a Football Club that was subject to a sporting sanction if the relevant Insolvency Event occurred in the 30 days immediately following his having resigned as a Relevant Person of that Football Club;

(B) the Insolvency Event of a Group Undertaking alone where the Football Club was subjected to a sporting sanction in accordance with Regulation 12.3 of The League Regulations (in the case of a Club), or the applicable rules of the league or association of which that Football Club was a member at the relevant time (if any) shall be treated as an Insolvency Event of the Football Club; and

(C) by way of example, where any Football Club or Group Undertaking has been subject to more than one Insolvency Event during the process of compromising or entering into a composition with its creditors (for example Administration followed by exit via a Company Voluntary Arrangement), this will only count as one Insolvency Event;

'Football Club' means any Club or club.

'Registered Offender' means any person who is required to notify personal information to the police in accordance with Part 2 of the Sexual Offences Act 2003.

‘Relevant Person’ means in respect of any Club any individual Person (and not any Entity) operating the powers that are usually associated with the powers of a director of a company incorporated under the 2006 Act (as a Company limited by shares or by guarantee). Further, and without prejudice to the generality of the foregoing, the following individuals shall in any event be deemed to qualify as a Relevant Person Relevant Person:

(a) a director as defined by Section 250 of the 2006 Act;

(b) a shadow director as defined by Section 251 of the 2006 Act;

(c) a person registered as a director or secretary of the Club with the Registrar of Companies;

(d) a person for whom a Form AP01 (to be filed with the Registrar of Companies) has been completed in relation to the Club;

(e) a person who has been elected to become a director of the Club at a meeting of the board of directors of the Club;

(f) a person who has been elected to become a director of the Club at a meeting of the members of the Club;

(g) a person in accordance with whose directions or instructions the persons constituting the management of the Club are accustomed to act;

(h) any Authorised Signatory; (i) any duly appointed signatory (as that term is utilised in Regulation 44.1);

(j) any 'chief executive' officer, 'general manager', 'chief operating officer' or any other person undertaking any duties which would objectively be considered to be equivalent to those roles;

(k) any person appointed by those with Control over the Club to represent their interests in the management of the Club; and

(l) a person who has Control over the affairs of the Club,

but the definition of 'Relevant Person' expressly excludes any external legal, financial or other professional advisers where they are acting in a capacity regulated by a professional regulatory body and do not hold any interest (in excess of a 5% shareholding) in the Club.

'Sports Governing Body' means any ruling body of a sport that is recognised by the International Olympic Committee, UK Sport, Sport England, another of the home country sports councils, or any other national or international sporting association, league, association or other competent governing body of any sport, wherever situated.

'Unspent' means the following period is still running in respect of the Conviction in question:

(a) the period during which the Conviction is considered unspent under the Rehabilitation of Offenders Act 1975; or

(b) (where the Rehabilitation of Offenders Act 1975 does not apply for any reason) the period during which the Conviction would have been considered unspent under the Rehabilitation of Offenders Act 1975 had that Act applied to the Conviction.

1.2 In this Appendix, a reference to statute or a statutory provision or sporting rule is a reference to that statute or provision or rule as it is in force at the time of application of this Appendix 3, taking into account any amendment, extension, or re-enactment thereof, and including any subordinate legislation for the time being in force made under it.

2 Reporting Requirements

2.1 Clubs promoted into The League from the National League and those relegated into The League from the Premier League shall submit a duly completed Declaration in respect of each of its Relevant Persons to The League within 14 days of becoming a member of The League. All other Clubs shall submit a duly completed Declaration in respect of each of its Relevant Persons to The League no later than 14 days before the commencement of each Season. In all cases, the Declaration must be signed by both the Relevant Person and an Authorised Signatory (who must not be the same person).

2.2 The League may at any time by notice in writing require any Club to supply to The League, within such period as The League shall reasonably specify, but in any event within 14 days of the date on which the notice was issued, such information as The League may specify to enable The League to satisfy itself that the Club has complied with the provisions of Rule 2.1.

2.3 If at any time after a Club makes the submission of Declarations referred to in Rule 2.1 another person proposes to become a Relevant Person of that Club (including for the avoidance of doubt by virtue of being a shadow director or acquiring Control of the Club):

(a) the Club shall no later than 10 Normal Working Days prior to the date on which it is anticipated that such person shall become a Relevant Person submit to The League a duly completed Declaration in respect of that person, at which point that person shall be bound by and subject to the Regulations;

(b) within 5 Normal Working Days of receipt thereof The League shall advise the Club of the time-frame within which The League, acting reasonably, expects to be able to finalise its enquiries in respect of that person; and

(c) following completion of those enquiries, The League shall advise the Club in accordance with Rule 3.1 whether or not The League considers that the person is subject to a Disqualifying Condition.

2.4 A person who proposes to be a Relevant Person may not do anything that brings him within the definition of a Relevant Person, and the Club may not permit him to do anything that brings him within that definition, unless and until the Club has received confirmation from The League in accordance with Rule 2.3(c) that as far as The League is aware the person is not subject to any Disqualifying Condition.

2.5 A Relevant Person shall, within 14 days of any change in any of the particulars set out within his Declaration, provide an updated Declaration to his Club.

2.6 A Club shall, within 14 days of becoming aware of any change to any of the particulars previously submitted by the Club to The League, provide an updated Declaration to The League.

2.7 The Board may, after consultation with Clubs, levy fees (payable by Member Clubs) for the processing of Declarations.

3 Decision

3.1 Where The League decides (whether based on a Declaration or otherwise) that a person who is or wishes to become a Relevant Person is subject to a Disqualifying Condition, The League shall notify the person and his Club in writing of that decision (with reasons).

3.2 Where the person is a Relevant Person when the decision is made:

(a) within 28 days of receipt of that notice (or such other period as is specified by The League in the notice) he must resign as a director or officer of the Club (where applicable) and/or take such other steps as are necessary in all the circumstances to ensure that he no longer comes within the definition of a Relevant Person; and

(b) thereafter he must ensure that he continues not to come within the definition of a Relevant Person for so long as the Disqualifying Condition subsists.

3.3 Where the person is not a Relevant Person when the decision is made, he must not do anything that brings him within the definition of a Relevant Person for so long as the Disqualifying Condition subsists.

3.4 A Club must not permit any person who is subject to a Disqualifying Condition either to become a Relevant Person or (if he was already a Relevant Person before the Disqualifying Condition arose) to continue to be a Relevant Person for the Club, for so long as the Disqualifying Condition subsists.

3.5 Further, no Person may acquire any Holding in a Club if, pursuant to the law of the United Kingdom or the European Union:

(a) he is prohibited from entering the United Kingdom; or

(b) no funds or economic resources may be made available, directly or indirectly, to or for his benefit.

4 Compliance

4.1 The League may exercise any of the powers of investigation conferred on it under the Regulations to determine compliance with the requirements of this Appendix 3. Without prejudice thereto, at any time, by notice in writing The League may require any Club and/or any Relevant Person (or person proposing to become a Relevant Person) to supply to The League within 14 days (or such other period as The League may reasonably specify) such information as The League may reasonably require to demonstrate compliance by the Club and/or the Relevant Person or person proposing to become a Relevant Person (as applicable) with the requirements of this Appendix 3.

4.2 A person shall be guilty of misconduct if he (whether intentionally or otherwise): (a) fails to provide a signed Declaration when required under Rule 2;

(b) signs a Declaration that is false;

(c) fails to notify his Club or The League of any change to the particulars set out within a Declaration that he has signed; or (d) fails to comply with any of the other requirements imposed on him by Rule 2 and/or Rule 3.

4.3 A Club shall be guilty of misconduct if it (whether intentionally or otherwise):

(a) fails to comply with any of the requirements imposed on it under this Appendix 3, including (without limitation) the requirements of Rule 2 and/or Rule 3; or

(b) fails to ensure that Relevant Persons and other Officials of the Club comply with the requirements of this Appendix 3, including (without limitation) the requirements of Rules 2 and 3. 4.4 Where misconduct as specified in Rule 4.2 or Rule 4.3 occurs, The League’s powers to bring disciplinary proceedings under the Regulations shall apply, provided that in addition to the sanctions for misconduct set out in the Regulations: (a) The League shall have the power to prescribe fixed fines pursuant to Regulation 83 of the Regulations, in respect of a failure by a Club to comply with the reporting requirements of Rule 2. There shall be no appeal against such penalties;

(b) where a Club:

(i) fails three or more times, following written demand from The League, to provide The League with a Declaration or an update to a Declaration and/or any other information required pursuant to Rule 4;

(ii) intentionally, recklessly or negligently provides to The League a false Declaration in respect of any Relevant Person; or

(iii) fails to ensure within 14 days of receipt of written notice from The League (or within such other period as is specified by The League in that notice) that a Relevant Person of the Club complies with the requirements of Rule 2 and Rule 3,

then The League may give notice requiring the Club to transfer its membership to the Company Secretary (the ‘Notice’) in accordance with Articles 4.5 and 4.7 of the Articles of Association. Article 4.8 (suspension of the Notice) shall apply in the Board’s absolute discretion. There shall be no appeal against the service of the Notice.

5 Appeal

5.1 A person has the right to appeal against The League’s decision that he is subject to a Disqualifying Condition (an ‘Appeal’).

5.2 The Appeal:

(a) must be filed with the company secretary within 14 days of receipt of notice of The League's decision;

(b) must set out the grounds on which it is brought;

(c) shall be heard by the League Arbitration Panel in accordance with the provisions of Section 9 of the Regulations, supplemented by the provisions of this Rule 5. In the event of any conflict between Section 9 and this Rule 5, this Rule 5 shall prevail;

(d) shall only be upheld if the person bringing the Appeal satisfies The League Arbitration Panel that:

(i) contrary to The League’s decision, he is not subject to a Disqualifying Condition; or

(ii) he is subject to a Disqualifying Condition but:

(A) that Disqualifying Condition is a Conviction by a court outside of England and Wales, a finding of the conduct referred to in paragraph (j) of the definition of Disqualifying Condition, or a suspension or ban or other disqualification by a Sports Governing Body or professional body; and

(B) there are compelling reasons why it should not prevent him acting as a Relevant Person.

5.3 On application by the person bringing the Appeal, the League Arbitration Panel may stay implementation of The League’s decision pending determination of the Appeal, where the person satisfies it that such a stay is necessary to avoid undue prejudice. Thereafter, the League Arbitration Panel may:

(a) uphold the Appeal and set The League’s decision aside on one of the grounds set out in Rule 5.2(d);

(b) reject the Appeal but (where the grounds of the Appeal include grounds for a Review Application) consider the matter as a Review Application under Rule 5.6; or

(c) simply reject the Appeal Application (in which case the League Arbitration Panel may stipulate:

(i) a deadline for implementation of the decision; and

(ii) a period within which a Review Application may not be made.

5.4 Where a person does not appeal against The League's decision that he is subject to a Disqualifying Condition, or his appeal against that decision is unsuccessful, he may (subject to any Rule 5.3(c)(ii) stipulation), apply to the League Arbitration Panel for an order that his disqualification should be for a shorter period than the period during which his Disqualifying Condition subsists (a ‘Review Application‘).

5.5 The Review Application must:

(a) must set out the grounds on which it is brought;

(b) shall be heard by the League Arbitration Panel in accordance with the provisions of Section 9 of the Regulations, supplemented by the provisions of this Rule 5. In the event of any conflict between Section 9 and this Rule 5, this Rule 5 shall prevail:

(c) shall only be upheld if the person bringing the application satisfies the League Arbitration Panel that disqualifying him for the entirety of the period for which his Disqualifying Condition subsists would be disproportionate in light of the nature of that Disqualifying Condition.

5.6 The League Arbitration Panel may:

(a) Uphold the Review Application and specify a shorter period of disqualification, having regard to all of the circumstances of the case; or

(b) reject the Review Application and direct that the person shall remain disqualified for so long as the Disqualifying Condition subsists (in which case the League Arbitration Panel may also stipulate a period of time within which a subsequent Review Application shall not be made).

6 Implementation

6.1 The original version of these Rules came into force on 10th March 2005. This amended version came into force on 6th June 2015.