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      Question

      Which of the following indicators establishes a

      definitive "Control Relationship" link when grouping connected counterparties?
      A One counterparty purchasing more than 25% of another's manufactured production output Correct Answer Incorrect Answer
      B One entity holding or controlling more than 50% of the voting rights of another entity Correct Answer Incorrect Answer
      C Both counterparties utilizing the exact same electronic trade repository platform Correct Answer Incorrect Answer
      D One counterparty guaranteeing less than 5% of the other's outstanding exposure value Correct Answer Incorrect Answer
      E Both corporate firms maintaining operational accounts with the same clearing member bank Correct Answer Incorrect Answer

      Solution

      A control relationship is automatically triggered under connectedness rules if one entity directly or indirectly owns or controls more than 50% of the voting rights of another entity, making them a single risk group.

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