ZZ Bhd, a listed corporation, is an investment holding company and it has one main subsidiary, YY Sdn Bhd which conducts stockbroking business. YY Sdn Bhd provides a wide range of products or services to its clients which may involve related parties. As ZZ Bhd's main business involves or relates to dealings in securities, can ZZ Bhd rely on Rule 10.08(11)(g) of the ACE LR in respect of dealings in securities involving related parties to state that such transactions are not related party transactions, particularly since securities do not fall within the ambit of Rule 10.08(11)(g) of the ACE LR?
The products or services provided by ZZ Bhd to its related parties such as taking orders to acquire or dispose securities, nominees and custody services which although are in relation to securities, would come within the ambit of "stockbroking services" under Rule 10.08(11)(g) of the ACE LR. Therefore, offering of such products or services to ZZ Bhd's related parties would not be considered as related party transactions provided that all conditions in Rule 10.08(11)(g) of the ACE LR are fulfilled. However, ZZ Bhd's dealings in securities as a principal would not be exempted under Rule 10.08(11)(g) of the ACE LR (as the definition of "goods" excludes securities) and therefore, would be regarded as related party transactions if they involve interests of related parties.