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Frequently Asked Questions - #46

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If two entities enter into a bidding agreement, joint venture for the purpose of bidding in the auction, bidding consortium, or other arrangement pertaining to bidding in the auction (an “Arrangement”), are these entities associated?  If entities are associated with each other, are these entities automatically considered to be part of an Arrangement?   

There is no necessary relationship between associations and an Arrangement with respect to the auction. 

If two entities participate in an Arrangement, they are not necessarily associated.  For two entities to be associated with one another, some degree of relationship through the corporate structure of the two entities is necessary.  Separate entities that have no corporate ties could participate in an Arrangement to submit bids in the auction, each providing separate resources or expertise for participating in the auction (e.g., financial support from one entity and trading expertise from another).  In that case, the entities participate in an Arrangement but they are not associated.

If two entities are associated, they are not necessarily part of an Arrangement.  It is possible that two entities that are affiliated (and thus associated) would not know of each other’s plans to participate in the auction.  Such entities may not be able (because one of the entities is regulated, for example) or may not be willing to collaborate in the submission of bids in the auction.  In that case, the entities are not part of any sort of Arrangement but they are nevertheless associated.

11/15/2021, in Association and Confidential Information Rules.

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