S.I. No. 68/1996 - Companies Act, 1990 (Uncertificated Securities) Regulations, 1996

CONTENTS

CHAPTER I Citation, Commencement & Interpretation

Regulation

1. Citation and Construction

2. Commencement

3. Interpretation

CHAPTER II Transferring & Recording Shares & Securities

4. Formalities of Transfer of securities

5. Transfer in writing

6. Participation in respect of shares

9. Participation in respect of securities other than shares

10. Entries on registers

11. Effect of entries on registers

12. Rectification of and changes to registers of securities

13. Closing of registers

14. Attendance and Voting at meetings

15. Notice of meetings

16. Registration of transfers of securities

17. Registration of linked transfers

18. Position of a transferee prior to entry on register Regulation

19. Prohibition on issue of certificates

20. Conversion of securities into certificated form

21. Endorsements on certificates

22. Interests in uncertificated units

23. Liabilities of trustees

24. Conversion of securities into uncertificated form

25. New issues in uncertificated form

CHAPTER III Approval and Compliance of Operator

26. Application for Approval

27. Grant of Approval

28. Recognition of operator approved by competent authority

29. Delegation of Minister's Functions

30. Appeal to Minister

31. Withdrawal of Approval

32. Withdrawal of Recognition

33. Compliance order and directions

34. Requests for information from the Operator

CHAPTER IV Operation of Automated Transfers and Registration Regulation

35. Properly authenticated dematerialised instructions

CHAPTER V Minority Shareholders

36. Notices under section 204 of the 1963 Act

CHAPTER VI Supplementary and Incidental

37. Evidence of system-?entries

SCHEDULE S.I. No. 68 of 1996.

COMPANIES ACT, 1990 (UNCERTIFICATED SECURITIES) REGULATIONS, 1996.

I, PAT RABBITTE, Minister of State at the Department of Enterprise and Employment, in exercise of the powers conferred on me by section 4 of the Companies (Amendment) Act, 1977 (No. 31 of 1977) and section 239 of the Companies Act, 1990 (No. 33 of 1990) and the Enterprise and Employment (Delegation of Ministerial Functions) Order, 1995 ( S.I. No. 42 of 1995 ), to enable title to securities to be evidenced otherwise than by a certificate and transferred without a written instrument, and make provision for certain supplemental and incidental matters, hereby make the following regulations:

CHAPTER I Citation, Commencement and Interpretation

1 Citation and Construction

1. (1) These regulations may be cited as the Companies Act, 1990 (Uncertificated Securities) Regulations, 1996.

• (2) These regulations shall be construed as one with the Companies Acts.

2 Commencement

2. These regulations shall come into force on the 1st April, 1996.

3 Interpretation

3. (1) In these regulations except where the context otherwise requires—

"the 1963 Act" means the Companies Act, 1963 ;

"the 1977 Act" means the Companies (Amendment) Act, 1977 ;

"the 1990 Act" means the Companies Act, 1990 ;

"the 1995 Act" means the Stock Exchange Act, 1995 ;

"articles of association", in the case of a company which is not a company within the meaning of section 2 (1) of the 1963 Act, shall include its charter, bye-laws or other constituent documents;

"certificate", means any certificate, instrument or other document of, or evidencing, title to, a unit or units of security;

"certificated unit of a security" means a unit of a security other than an uncertificated unit of a security as defined in this regulation;

"the Companies Acts" means the 1963 Act and any enactment which is to be construed therewith;

"company" means a company within the meaning of section 2 (1) of the 1963 Act and any body corporate within the meaning of section 377 (1) of the 1963 Act;

"competent authority" means any person authorised under the laws of a Member State to approve persons to operate a relevant system;

"computer" means any device or combination or succession of devices for storing and processing information, and any reference to information being derived from other information is a reference to its being derived therefrom by calculation, comparison or any other process;

"court" means a court of competent jurisdiction;

"dematerialised instruction" means an instruction sent or received by means of a relevant system;

"director", in the case of a company which is not a company within the meaning of section 2 (1) of the 1963 Act, includes a member of the governing body of the company;

"enactment" includes an enactment comprised in any subordinate legislation within the meaning of the Interpretation Act, 1937 ;

"generate", in relation to an operator-instruction, means to initiate the procedures by which an operator-instruction comes to be sent;

"guidance", in relation to an operator, means guidance issued by the operator which is intended to have continuing effect and is issued in writing or other legible form, which if it were a rule, would come within the definition of a rule;

"instruction" includes any instruction, election, acceptance or any other message of any kind;

"interest in a security" means any legal or equitable interest or right in relation to a security, including—

( a ) an absolute or contingent right to acquire a security created, allotted or issued or to be created, allotted or issued; and

( b ) the interests or rights of a person for whom a security is held by a custodian or depository;

"issue", in relation to a new unit of a security, means to confer title to that unit on a person;

"issuer-instruction" means a properly authenticated dematerialised instruction attributable to a participating issuer;

"officer", in relation to a participating issuer, includes—

( a ) where the participating issuer is a company, such persons as are mentioned in section 2 (1) of the 1963 Act;

( b ) where the participating issuer is a partnership, a partner; or in the event that no partner is situated in the State, a person in the State who is acting on behalf of the partner; and

( c ) where the participating issuer is neither a company nor a partnership, any member of its governing body; or in the event that no member of its governing body is situated in the State, a person in the State who is acting on behalf of its governing body;

"operator" means any person specified in regulation 28 or approved by the Minister under these regulations as operator of a relevant system;

"operator-instruction" means a properly authenticated dematerialised instruction attributable to an operator;

"operator-system" means those facilities and procedures which are part of the relevant system, which are maintained and operated by or for an operator, by which the operator generates operator-instructions and receives dematerialised instructions from system-participants and by which persons change the form in which units of a participating security are held;

"participating issuer" means a person who has issued a security which is a participating security;

"participating security" means a security, title to units of which is permitted by an operator to be transferred by means of a relevant system;

"practices" in relation to an operator means non-binding guidance issued by the operator;

"register of members" means a register of members maintained by a company under section 116 (1) of the 1963 Act;

"register of securities"—

( a ) in relation to shares, means a register of members, and

( b ) in relation to units of a security other than shares, means a register maintained by the issuer, whether by virtue of these regulations or otherwise, of persons holding the units;

"relevant system" means a computer based system and procedures which enable title to units of a security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters and "relevant system" includes an operator-system;

"rules" in relation to an operator, means rules made or conditions imposed by the operator with respect to the provision of the relevant system;

"securities" means shares, stock, debentures, debenture stock, loan stock, bonds, units in undertakings for collective investments in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), and other securities of any description;

"settlement-bank" in relation to a relevant system, means a person who has contracted to make payments in connection with transfers of title to uncertificated units of a security by means of that system;

"share" means share or stock in the share capital of a company;

"system entry" means any entry or record made, supplied or stored in legible or non-legible form by any operator or any system-participant in any register of securities or in connection with the operation of a relevant system and any dematerialised instruction issued by any such persons;

"system-member", in relation to a relevant system, means a person permitted by an operator to transfer title to uncertificated units of a security by means of that system and includes, where relevant, two or more persons who are jointly so permitted;

"system-member instruction" means a properly authenticated dematerialised instruction attributable to a system-member;

"system-participant" in relation to a relevant system, means a person who is permitted by an operator to send and receive properly authenticated dematerialised instructions and "sponsoring system-participant" means a system-participant who is permitted by an operator to send properly authenticated dematerialised instructions attributable to another person and to receive properly authenticated dematerialised instructions on another person's behalf;

"system-user", in relation to a relevant system, means a person who as regards that system is a participating issuer, system-member, system-participant or settlement-bank;

"uncertificated unit of a security" means a unit of a security title to which is recorded on the relevant register of securities as being held in uncertificated form, and title to which, by virtue of these regulations, may be transferred by means of a relevant system and corresponding expressions shall be construed accordingly;

"unit of a security" means the smallest possible transferable unit of the security (for example a single share);

and any other expression bears the meaning given to it in the 1963 Act or the 1990 Act.

• (2) For the purposes of these Regulations—

( a ) a dematerialised instruction is properly authenticated if it complies with the specifications in that regard contained in the rules made and practices instituted by an operator corresponding to those in paragraph 5 (b) of the Schedule to these regulations; and

( b ) a dematerialised instruction is attributable to a person if it is expressed to have been sent by that person, or if it is expressed to have been sent on behalf of that person, in each case in accordance with the specifications in that regard contained in the rules made and practices instituted by an operator corresponding to those in paragraph 5 (c) of the Schedule to these regulations; and a dematerialised instruction may be attributable to more than one person.

• (3) In these regulations, except where otherwise indicated—

( a ) a reference to a numbered regulation is a reference to the regulation of these regulations so numbered;

( b ) a reference in a regulation to a numbered paragraph is a reference to the paragraph of that regulation so numbered;

( c ) a reference in the Schedule to a numbered paragraph is a reference to the paragraph of that Schedule so numbered;

( d ) a reference in a paragraph to a numbered sub-paragraph is a reference to the sub-paragraph of that paragraph so numbered.

• (4) References to title to securities include any legal or equitable interest in securities and references to a transfer of title include a transfer by way of security.

• (5) Where, in these regulations, anything is required or allowed to be done within a number of days not exceeding six a day that is Saturday, Sunday or public holiday shall not be reckoned in computing that number.

CHAPTER II Transferring and Recording Shares and Securities

4 Formalities of Transfer of securities

4. (1) Notwithstanding section 79 or section 81 of the 1963 Act or section 2 (1) of the Stock Transfer Act, 1963 , title to securities may be evidenced and transferred without a written instrument provided that such title is evidenced and transferred in accordance with these regulations.

• (2) References in any enactment or rule of law to a proper instrument of transfer or to a transfer with respect to securities, or any expression having like meaning, shall be taken to include a reference to an operator-instruction to a participating issuer to register a transfer of title on the relevant register of securities in accordance with the operator-instruction.

• (3) Paragraphs (1) and (2) of this regulation shall not have effect in relation to an operator instruction—

( a ) unless the operator giving the instruction has entered into an agreement with the Revenue Commissioners in relation to the payment of any stamp duty chargeable on transfers of title to securities through the relevant system,

( b ) in the event of such an agreement having been terminated prior to the performance of the instruction, unless the instruction has been performed within seven days of the termination, and for the purpose of this paragraph an agreement shall be deemed to have been terminated on the date notice of the termination is published by the Revenue Commissioners in Iris Oifigiúil and in two national newspapers, and

( c ) an agreement for the purpose of this regulation shall not impose an obligation on the operator giving the instruction to pay over to the Revenue Commissioners an amount of stamp duty greater than that collected on foot of transfers of title to securities through the relevant system.

5 Transfer in writing

5. Section 6 of the Statute of Frauds Act (Ireland), 1695 and section 28 (6) of the Supreme Court of Judicature (Ireland) Act, 1877 and any other rule of law requiring the execution under hand or seal of a document in writing for the transfer of property, shall not apply (if they would otherwise do so) to any transfer of title to uncertificated units of a security through a relevant system.

6 Participation in respect of shares

6. (1) Where an operator permits a class of shares in relation to which regulation 7 applies, or in relation to which a directors' resolution passed in accordance with regulation 8 is effective, to be a participating security, title to shares of that class which are recorded in a register of members as being held in uncertificated form may be transferred by means of the relevant system to which the permission relates.

• (2) For the purposes of regulations 7 and 8 any shares with respect to which share warrants to bearer are issued under section 88 of the 1963 Act shall be regarded as forming a separate class of share.

7 ..

7. (1) This regulation applies to a class of shares if a company's articles of association are consistent with—

( a ) the holding of shares in that class in uncertificated form,

( b ) the transfer of title to shares in that class by means of a relevant system, and

( c ) these regulations.

• (2) A company may provide for the holding of shares in such a class to which this regulation applies in uncertificated form, and the transfer of title to any such shares by means of a relevant system.

8 ..

8. (1) This regulation applies to a class of shares if a company's articles of association are inconsistent with—

( a ) the holding of shares in that class in uncertificated form,

( b ) the transfer of title to shares in that class by means of a relevant system, or

( c ) any provision of these regulations.

• (2) A company may resolve, subject to paragraph 6 (a), by resolution of its directors (in this Chapter referred to as a "directors' resolution") that title to shares of a class issued or to be issued by it may be transferred by means of a relevant system.

• (3) Upon a directors' resolution becoming effective in accordance with its terms, and for as long as it is in force, the articles of association in relation to the class of shares which were the subject of the directors' resolution, shall not apply to any uncertificated shares of that class to the extent that they are inconsistent with—

( a ) the holding of shares of that class in uncertificated form;

( b ) the transfer of title to shares of that class by means of a relevant system;

and

( c ) any provision of these regulations.

• (4) Unless a company has given notice to every member of the company in accordance with its articles of association of its intention to pass a directors' resolution before the passing of such a resolution, it shall give such notice within 60 days of the passing of the resolution and a printed copy of such a directors' resolution shall be forwarded to and recorded by the registrar of companies.

• (5) Notice given by the company before the coming into force of these regulations of its intention to pass a directors' resolution which, if it had been given after the coming into force of these regulations, would have satisfied the requirements of paragraph (4) shall be taken to satisfy the requirements of that paragraph.

• (6) In respect of a class of shares the members of a company may by ordinary resolution—

( a ) if a directors' resolution has not been passed, resolve that the directors of the company shall not pass a directors' resolution, or

( b ) if a directors' resolution has been passed but not yet come into effect in accordance with its terms, resolve that it shall not come into effect; or

( c ) if a directors' resolution has been passed and is effective in accordance with its terms but the class of shares has not yet been permitted by the operator to be a participating security, resolve that the directors' resolution shall cease to have effect; or

( d ) if a directors' resolution has been passed and is effective in accordance with its terms and the class of shares has been permitted by the operator to be a participating security, resolve that the directors shall take the necessary steps to ensure that title to shares of the class that was the subject of the directors' resolution shall cease to be transferable by means of a relevant system and that the directors' resolution shall cease to have effect;

and the directors shall be bound by the terms of any such ordinary resolution. A printed copy of any such resolution shall be forwarded to and recorded by the registrar of companies.

• (7) If default is made in complying with paragraphs (4) and (6), the participating issuer and every officer of the participating issuer who is in default shall be liable to a fine not exceeding £250.

• (8) A company shall not permit the holding of shares in such a class as is referred to in paragraph (1) in un-certificated form, or the transfer of title to shares in such a class by means of a relevant system, unless in relation to that class of shares a directors' resolution is effective.

• (9) This regulation shall not be taken to exclude the right of the members of a company to amend the articles of association of the company, in accordance with the articles, to allow the holding of any class of its shares in uncertificated form and the transfer of title to shares in such class by means of a relevant system.

9 Participation in respect of securities other than shares

9. (1) Subject to paragraph (2), where the operator permits a security other than a share to be a participating security, title to units of that security which are recorded in a register of securities as being held in uncertificated form shall be transferred by means of a relevant system.

• (2) If, in relation to any security (other than a share), the law under which it was constituted, or a current term of its issue, is consistent with—

( a ) the holding of title to units of that security in uncertificated form,

( b ) the transfer of title to units of that security by means of a relevant system, or

( c ) these regulations,

the issuer shall not permit the holding of units of that security in uncertificated form, or the transfer of title to units of that security, by means of a relevant system.

• (3) In this regulation the terms of issue of a security shall be taken to include the terms prescribed by the issuer on which units of the security are held and title to them is transferred.

10 Entries on registers

10. (1) A participating issuer which is a company shall enter on its register of members, in respect of any class of shares which is a participating security, the number of shares each member holds in uncertificated form and certificated form respectively.

• (2) In addition to the requirements of sections 91 and 92 of the 1963 Act, a participating issuer, who, apart from this regulation, is required by or under an enactment or instrument to maintain in the State a register of persons holding securities (other than shares) issued by it, shall enter on that register in respect of any class of security which is a participating security—

( a ) the names and addresses of the persons holding units of that security, and

( b ) the number of units of that security each person holds in uncertificated form and certificated form respectively.

• (3) A participating issuer who, apart from this regulation, is not required by or under an enactment or instrument to maintain in the State in respect of a participating security issued by it a register of persons holding units of that participating security, shall maintain in the State a register recording—

( a ) the names and addresses of the persons holding units of that security in uncertificated form; and

( b ) the number of such units of that security each person holds in that form.

• (4) If default is made in complying with paragraphs (1), (2) or (3), the participation issuer and every officer of the participating issuer who is in default shall be liable to a fine not exceeding £500.

• (5) For the purpose of paragraph (1) any shares with respect to which share warrants to bearer are issued under section 88 of the 1963 Act shall be regarded as a separate class of shares.

• (6) No notice of any trust, expressed, implied or constructive, shall be entered on a register of securities which is maintained by virtue of paragraph (3) in relation to uncertificated units of a security, or be receivable by the registrar of such a register.

11 Effect of entries on registers

11. (1) Subject to regulation 16 (7), an entry on a register mentioned in paragraph (1) or (2) of regulation 10 which records a person as holding units of a security in uncertificated form shall be evidence of such title to the units as would be evidenced if the entry on the register related to units of that security held in certificated form.

• (2) Subject to regulation 16 (7), an entry on a register maintained by virtue of paragraph (3) of regulation 10 shall be prima facie evidence that the person to whom the entry relates has such title to the units of the security which that person is recorded as holding in uncertificated form as if the units were held in certificated form.

12 Rectification of and changes to registers of securities

12. (1) A participating issuer shall not rectify a register of securities in relation to uncertificated units of a security held by a system-member except—

( a ) with the consent of the operator, or

( b ) by order of the High Court.

• (2) A participating issuer who rectifies or otherwise changes an entry on a register of securities in relation to uncertificated units of a security (except in response to an operator-instruction) shall immediately—

( a ) notify the operator, and

( b ) inform the system-members concerned,

of the change to the entry.

13 Closing of registers

13. Notwithstanding section 121 of the 1963 Act, a participating issuer shall not close a register of securities relating to a participating security without the consent of the operator.

14 Attendance and Voting at meetings

14. (1) For the purposes of determining which persons are entitled to attend or vote at a meeting, and how many votes such persons may cast, the participating issuer may specify in the notice of the meeting a time, not more than 48 hours before the time fixed for the meeting, by which a person must be entered on the relevant register of securities in order to have the right to attend or vote at the meeting.

• (2) Changes to entries on the relevant register of securities after the time specified by virtue of paragraph (1) shall be disregarded in determining the rights of any person to attend or vote at the meeting, notwithstanding any provisions in any enactment, articles of association or other instrument to the contrary.

15 Notice of meetings

15. (1) For the purposes of serving notices of meetings, whether under section 134 (a) of the 1963 Act, any other enactment, a provision in the Articles of Association or any other instrument, a participating issuer may determine that persons entitled to receive such notices are those persons entered on the relevant register of securities at the close of business on a day determined by the participating issuer.

• (2) The day determined by a participating issuer under paragraph (1) may not be more than 7 days before the day that the notices of the meeting are sent.

16 Registration of transfers of securities

16. (1) A participating issuer shall register a transfer of title to uncertificated units of a security on a register of securities in accordance with an operator-instruction unless—

( a ) the transfer is prohibited—

• (i) by order of the High Court, provided both the participating issuer and the relevant operator shall both have had actual notice of the order before the operator-instruction is sent and the fact of such actual notice on the part of both such persons shall have been established to the satisfaction of the court by the person seeking to rely on the order, or

• (ii) by or under an enactment, or

( b ) the participating issuer it has actual notice that the transfer is—

• (i) avoided by or under an enactment, or

• (ii) a transfer to a deceased person, or

( c ) the circumstances described in paragraph (2) apply, or

( d ) the participating issuer is entitled by virtue of paragraph (3) to refuse to register the transfer.

• (2) The circumstances referred to in paragraph (1) (c) are that the transfer is one of two or more transfers in respect of which the operator has notified the participating issuer in accordance with regulation 17 (1), and that to those transfers regulation 17 (2) does not apply by virtue of regulation 17 (3).

• (3) A participating issuer may refuse to register a transfer of title to uncertificated units of a security in accordance with an operator-instruction if the instruction requires a transfer of units—

( a ) to an entity which is not a natural or legal person,

( b ) to a minor,

( c ) to be held jointly in the names of more persons than is permitted under the terms of issue of the security, or

( d ) where in relation to the operator-instruction the participating issuer has actual notice from the operator of any of the matters specified in regulation 35 (5) (a).

• (4) A participating issuer shall notify the operator by issuer-instruction that the transfer has been registered in response to an operator-instruction to do so.

• (5) A participating issuer shall not register a transfer of title to uncertificated units of a security on a register of securities unless required to do so—

( a ) by an operator-instruction,

( b ) by order of the High Court,

( c ) by or under an enactment, or

( d ) by regulation 36 (2).

• (6) Paragraph (5) shall not be taken to prevent a participating issuer from entering a person on a register of securities to whom the title to uncertificated units of a security has been transmitted by operation of law.

• (7) Any purported registration of a transfer of title to an uncertificated unit of a security other than in accordance with this regulation shall be of no effect.

• (8) If a participating issuer refuses to register a transfer of any shares or debentures, the participating issuer shall, within 2 months after the date on which the transfer was lodged with the participating issuer, send to the transferee notice of the refusal.

• (9) If default is made in complying with paragraph (8), the participating issuer and every officer of the participating issuer who is in default shall be liable to a fine not exceeding £250.

17 Registration of linked transfers

17. (1) Where an operator sends two or more operator-instructions requiring a participating issuer to register two or more transfers of title to uncertificated units of a security, and it appears to the operator—

( a ) either—

• (i) that there are fewer units of the security registered in the name of a person identified in any one of the operator-instructions as a transferor than the number of units to be transferred from that person, or

• (ii) that any one of the transfers taken alone is one in relation to which it has not been established in accordance with the procedures of the relevant system that a settlement-bank has agreed to make a payment, and

( b ) that registration of all of the transfers would result in each of the persons identified in the operator-instructions as a transferor having title to a number of units of a security equal to or greater than nil, and

( c ) that the combined effect of all the transfers taken together would result in payment being made by the settlement-bank,

the operator may notify the participating issuer that the transfers are linked transfers.

• (2) Except in the circumstances described in paragraph (3), notwithstanding that there may be fewer uncertificated units of the security registered in the name of a person identified in any one of the operator-instructions as a transferor than the number of uncertificated units to be transferred from that person, where an operator notifies a participating issuer that transfers are linked transfers, the participating issuer may either—

( a ) register the combined effect of all the transfers taken together, or

( b ) register all the transfers simultaneously.

• (3) Paragraph (2) does not apply in a case in which—

( a ) registration of the combined effect of the linked transfers, or simultaneous registration of all the transfers (as the case may be), would not result in each of the persons identified in the operator-instructions as a transferor having title to a number of uncertificated units of the security equal to or greater than nil, or

( b ) one or more of the transfers constituting the linked transfers may not be registered by virtue of the circumstances specified in regulation 16 (1) (a) or (b), or is to be refused registration by virtue of regulation 16 (3).

18 Position of a transferee prior to entry on register

18. (1) At the time an operator-instruction is sent requiring a participating issuer to register on a register of securities a transfer of title to any uncertificated units of a security—

( a ) the transferee shall acquire an equitable interest in the requisite number of uncertificated units of the security of the kind specified in the operator-instruction in which the transferor has an equitable interest by virtue of this regulation, or in relation to which the transferor is recorded on the relevant register of securities as having title, and

( b ) the equitable interest shall subsist until the time specified in paragraph (3).

• (2) For the purposes of paragraph (1) (a) it shall not be denied that the transferee has obtained the equitable interest referred to in paragraph (1) (a), solely by reason of the fact that the transferor acquired the equitable interest by virtue of paragraph (1) (a) at the same time as the transferee's equitable interest arises in that interest.

• (3) Subject to any enactment or rule of law, an interest acquired under paragraph (1)—

( a ) in a case other than one in which under regulation 17 (2) (a) a participating issuer registers the combined effect of linked transfers, shall subsist until the time that the transferee is entered on the register of securities in respect of the transfer of the units, and

( b ) in a case in which under regulation 17 (2) (a) a participating issuer registers the combined effect of linked transfers, shall subsist until the time that the combined effect of all the linked transfers is registered.

• (4) The requisite number for the purposes of this regulation is whichever of the following is the lower at the time that the operator-instruction is sent, namely—

( a ) the number of units which are specified in the operator-instruction, and

( b ) the total of the number of uncertificated units in relation to which the transferor is recorded on the register of securities as having title and the number in which the transferor has an interest by virtue of paragraph (1), less that number of units in which such interests subsist in favour of a third party by virtue of an earlier operator-instruction requiring a participating issuer to register on a register of securities a transfer of title to those units.

• (5) This regulation has effect notwithstanding that the units to which the operator-instruction relates, or in which an interest arises by virtue of paragraph 1, of any of them, may be unascertained.

• (6) Subject to paragraph (5), this regulation shall not be construed as conferring a proprietary interest (whether of the kind referred to in paragraph (1) or any other kind) in units of a security if the conferring of such an interest at the time specified in these regulations would otherwise be void by or under an enactment or rule of law.

• (7) In this regulation—

( a ) "the transferee" means the person identified in the operator-instruction as the transferee, and

( b ) "the transferor" means the person identified in the operator-instruction as the transferor.

19 Prohibition on issue of certificates

19. (1) Notwithstanding any enactment, or rule of law, and in particular section 86 of the 1963 Act, but subject to regulation 20, a participating issuer shall not issue a certificate in relation to any uncertificated units of a participating security.

• (2) A document issued by or on behalf of a participating issuer purportedly evidencing title to an uncertificated unit of a participating security shall not be evidence of title to the unit of the security; and in particular section 87 (1) of the 1963 Act shall not apply to any document issued with respect to uncertificated shares.

20 Conversion of securities into certificated form

20. (1) A participating issuer shall not change a unit of a participating security from uncertificated to certificated form except—

( a ) where permitted by the rules made and practices instituted by an operator, or

( b ) following receipt of an operator-instruction requiring the conversion into certificated form of uncertificated units of a participating security registered in the name of a system-member, or

( c ) subject to regulation 16, following receipt of an operator-instruction requiring the registration of a transfer of title to uncertificated units of a security to a person who is not a system-member, or

( d ) on the registration, in accordance with regulation 36 (2), of an offeror who is not a system-member as holder of the units of the security referred to in that regulation.

• (2) In the circumstances specified in paragraph (1) (b), (c) and (d) a participating issuer shall—

( a ) record on the register of securities that the units of the security are held in certificated form;

( b ) where a certificate can be issued for the security, issue a certificate in respect of the units of the security to the relevant person; and

( c ) notify the operator that the units are no longer held in uncertificated form.

• (3) Every participating issuer shall, within 2 months after the date on which the issuer receives a relevant operator-instruction which can be complied with in accordance with paragraph (2), complete and have ready for delivery the certificates of all securities transferred pursuant to the operator-instruction.

• (4) If default is made in complying with paragraph (3), the participating issuer and every officer of the participating issuer who is in default shall be liable to a fine not exceeding £250.

• (5) If any participating issuer served with a notice requiring the participating issuer to make good any default in complying with the provisions of paragraph (3) fails to make good the default within 10 days after the service of the notice, the court may on the application of the person entitled to have the certificates delivered, make an order directing the participating issuer and any officers of the participating issuer to make good the default within such time as may be specified in the order, and any such order may provide that all costs of and incidental to the application shall be borne by the participating issuer or by any officer of the participating issuer responsible for the default.

21 Endorsements on certificates

21. Any requirement in or under any enactment to endorse any statement or information on a certificate evidencing title to a unit of security (including any such requirement in section 104 of the 1963 Act)—

( a ) shall not prohibit the conversion into, or issue of, units of the security in uncertificated form, and

( b ) in relation to uncertificated units of the security, shall be taken to be a requirement to provide the holder of the units of security on request with the statement or information.

22 Interests in uncertificated units

22. The operator shall not be bound by or compelled to recognise any express, implied or constructive trust or other interest in respect of uncertificated units of a security, even if the operator has actual or constructive notice of the said trust or interest.

23 Liabilities of trustees

23. (1) Unless expressly prohibited from transferring units of a security by means of any computer based system, a person being a trustee or personal representative shall not be chargeable with a breach of trust or, as the case may be, with default in administering the estate by reason only of the fact that—

( a ) for the purpose of acquiring units of a security which that person has the power to acquire in connection with the trust or estate, the units are paid for under arrangements which provide for them to be transferred from a system-member but not to be so transferred until after the payment of the price;

( b ) for the purpose of disposing of units of security which that person has power to dispose of in connection with the trust or estate, the units are transferred to a system-member under arrangements which provide that the price is not to be paid until after the transfer is made; or

( c ) for the purposes of holding units of a security belonging to the trust or estate in uncertificated form and for transferring title to them by means of a relevant system, that person has become a system-member.

• (2) A trustee of a trust deed for securing an issue of debentures shall not be chargeable with a breach of trust by reason only of having consented to an amendment of the trust deed only for the purposes of—

( a ) allowing the holding of the debentures in uncertificated form;

( b ) allowing the exercise of rights attaching to the debentures by means of a relevant system; or

( c ) allowing the transfer of title to the debentures by means of a relevant system;

provided that notice of the amendment has been given to all persons having title to the debentures at least 30 days prior to such consent becoming effective.

24 Conversion of securities into uncertificated form

24. (1) A participating issuer shall not change a unit of a participating security from certificated form to uncertificated form except in the circumstances specified in paragraph (2).

• (2) The circumstances referred to in paragraph (1) are—

( a ) where the unit of the participating-security is held by a system-member, that the participating issuer has received—

• (i) a request in writing in the form required by the rules made and practices instituted by an operator to register the system-member as holding the unit in uncertificated form; and

• (ii) subject to paragraph (4), the certificate relating to the certificated unit which is to be converted into uncertificated form;

( b ) where the unit of the participating security is to be registered on a register of securities in the name of a system-member following a transfer of the unit to that person from a person other than a stock exchange nominee, that the participating issuer—

• (i) subject to paragraph (3), has received by means of the operator-system a proper instrument of transfer in favour of the system-member relating to the unit to be transferred;

• (ii) subject to paragraph (4), has received by means of the operator-system the certificate relating to the certificated unit which is to be transferred and converted into uncertificated form; and

• (iii) may accept by virtue of the rules made and practices instituted by an operator that the system-member to whom the unit is to be transferred wishes to hold it in uncertificated form; and

( c ) where the unit of the participating security is to be registered on a register of securities in the name of a system-member following a transfer of the unit to him from a stock exchange nominee, that the participating issuer—

• (i) has received a proper instrument of transfer in favour of the system-member from the nominee relating to the unit to be transferred; and

• (ii) may accept by virtue of the rules made and practices instituted by an operator that the system-member to whom the unit is to be transferred wishes to hold it in uncertificated form.

• (3) The requirement in paragraph (2) (b) (i) that the participating issuer shall have received an instrument of transfer relating to the unit of the participating security shall not apply in a case where for a transfer of a unit of that security no instrument of transfer is required.

• (4) The requirements in paragraph (2) (a) (ii) and (2) (b) (ii) that the participating issuer shall have received a certificate relating to the unit of the participating security shall not apply in a case where the system-member or transferor (as the case may be) does not have a certificate in respect of the unit to be converted into uncertificated form because no certificate has yet been issued to him.

• (5) In the circumstances specified in paragraph (2) (a), on receipt of the request referred to in paragraph (2) (a) (i) and (except where paragraph (4) applies) the certificate referred to in paragraph (2) (a) (ii), the participating issuer shall, within two months—

( a ) enter on the register of securities that the system-member holds the unit in uncertificated form; and

( b ) send the operator an issuer-instruction of the entry on the relevant register of securities.

• (6) In the circumstances specified in paragraph (2) (b), on receipt of the instrument of transfer referred to in paragraph (2) (b) (i) (except where paragraph (3) applies) and the certificate referred to in paragraph (2) (b) (ii) (except where paragraph (4) applies), the participating issuer shall—

( a ) upon recording that the system-member holds the unit, enter on the register of securities that the unit is held in uncertificated form; and

( b ) within 2 months thereafter, send the operator an issuer-instruction of the entry on the register of securities.

• (7) In the circumstances specified in paragraph (2) (c), on receipt of the instrument of transfer referred to in paragraph (2) (c) (i), the participating issuer shall—

( a ) upon recording that the system-member holds the unit, enter on the register of securities that the unit is held in uncertificated form; and

( b ) within 2 months thereafter, send the operator an issuer-instruction of the entry on the register of securities.

• (8) If default is made in complying with paragraphs (5), (6) or (7) the participating issuer and every officer of the participating issuer who is in default shall be liable to a fine not exceeding £250.

• (9) In this regulation, "stock exchange nominee" has the same meaning as in the 1977 Act.

25 New issues in uncertificated form

25. (1) A participating issuer may issue new units of a participating security in uncertificated form to a person if, and only if, that person is a system-member.

• (2) For the purposes of calculating the number of new units to which a system-member is entitled, a participating issuer may treat a system-member's holdings of certificated and uncertificated units of a security as if they were separate holdings.

• (3) On the issue in uncertificated form of new units of a participating security, the participating issuer shall by issuer-instruction notify the operator of the persons to whom the uncertificated units of a security have been issued and of the number of such units issued to each of those persons.

CHAPTER III Approval and Compliance of Operator

26 Application for Approval

26. (1) A person may apply to the Minister to be approved operator of a relevant system.

• (2) Any such application—

( a ) shall be made in such a manner as the Minister may direct, and

( b ) shall be accompanied by such information as the Minister may reasonably require for the purpose of determining the application.

• (3) At any time after receiving an application and before determining it, the Minister may require the applicant to furnish additional information.

• (4) The directions and requirements given or imposed under paragraphs (2) and (3) may differ as between different applications.

• (5) Any information to be furnished to the Minister under this regulation shall, if the Minister so requires, be in such form or verified in such manner as the Minister may specify.

• (6) Every application shall be accompanied by a copy of any rules and guidance to be issued by the applicant.

27 Grant of Approval

27. (1) If, on an application made under regulation 26, it appears that the requirements of the Schedule are satisfied with respect to the application, the Minister may, subject to the following paragraphs of this regulation, approve a person (in these regulations referred to as an approved operator) to operate a relevant system.

• (2) Approval of an operator under this regulation shall be by written instrument and may be subject to the fulfilment of conditions specified by the Minister to ensure compliance with these regulations and shall state the date on which it takes effect and may state the date on which it terminates.

• (3) Approval under this regulation shall be without prejudice to the requirements of the Competition Act, 1991 .

• (4) Where the Minister refuses to approve an operator on the basis of an application made under regulation 26 the Minister shall so inform the applicant in writing stating the reasons for the refusal.

28 Recognition of operator approved by competent authority

28. (1) A person approved by a competent authority to operate a relevant system may be granted recognition by the Minister to act as an operator for the purposes of these regulations, subject, in particular, to regulation 32.

• (2) The Minister may make the recognition subject to certain conditions, either when granted or during its currency.

29 Delegation of Minister's Functions

29. (1) The Minister may delegate any approval and other supervisory functions under this Chapter to a designated body.

• (2) The Minister may by written instrument revoke a designation under paragraph (1)—

( a ) at the request of, or with the consent of, the designated body, or

( b ) if at any time it appears to the Minister that the designated body is unable or unwilling to discharge all or any of the functions delegated to it.

30 Appeal to Minister

30. (1) Where a body designated under regulation 29 (1) refuses to approve a proposed operator, it shall serve notice on the proposed operator, and on the Minister, of its refusal to grant approval and state the reason therefor.

• (2) A proposed operator on whom a notice has been served under paragraph (1) of this regulation, may within 21 days of receipt of the notice, appeal to the Minister and the Minister shall consider any such appeal and may uphold or reject it.

• (3) When considering an appeal under this section, the Minister shall consult with the designated body and the proposed operator concerned and any other party the Minister thinks proper, provided that the period taken for consideration does not exceed three months.

• (4) If the Minister upholds an appeal made under this section, the designated body shall grant approval of the proposed operator.

• (5) An appeal under this section shall be accompanied by such fee as the Minister may be regulation prescribe.

• (6) The Public Offices Fees Act, 1879, shall not apply to any fees charged under this section.

31 Withdrawal of Approval

31. (1) The Minister may revoke approval of an operator in all or any of the following circumstances, namely, where—

( a ) a request has been made in that behalf by the operator, or

( b ) the operator—

• (i) has failed to operate a relevant system within 12 months of the date on which the approval to be an operator was granted, or

• (ii) has failed to operate as a relevant system for a period of more than 6 months, or

• (iii) is being wound up.

• (2) Without prejudice to the power of the Minister to revoke an approval under paragraph (1), the Minister may apply to the High Court, in a summary manner, for an order revoking the approval in any or all of the following circumstances, namely, if—

( a ) at any time it appears to the Minister that any requirement of the Schedule is not satisfied by an approved operator, or

( b ) it is expedient to do so in the interest of the proper and orderly regulation of operators, or their system users, or in order to protect investors,

( c ) the operator has, on indictment, been convicted of any offence under the Companies Acts or any offence involving fraud, dishonesty or breach of trust;

( d ) the approval was obtained by the operator knowingly or recklessly making false or misleading statements, or by knowingly or recklessly using false or misleading information;

( e ) the operator has failed to comply to a material degree with a requirement of these regulations having been first called upon to do so;

• (f) the operator no longer fulfils a condition or requirement imposed when approval was granted;

( g ) the operator becomes unable or, in the opinion of the Minister, is likely to become unable to meet its obligations to its creditors or suspends payments lawfully due.

• (3) When the Minister proposes to revoke the approval of an operator or proposes to apply to the court for an order to revoke approval of an operator, the Minister shall serve notice on the operator concerned of the proposal and the reasons therefor.

• (4) Where an application is made to the court under this regulation the court may make such order or orders as the circumstances may require.

• (5) Where approval of an operator is revoked and where the operator concerned is not a company which is being wound up.

( a ) the former operator and its system-users shall continue to be subject to the duties and obligations imposed by these regulations until all the liabilities, duties and obligations of the said operator have been discharged to the satisfaction of the Minister, and

( b ) the former operator shall, as soon as possible, after the revocation, notify the Minister, its system users and such other persons, if any, as the Minister indicates are to be notified of the measures being taken to discharge without undue delay the liabilities, duties and obligations of the said operator.

• (6) The Minister shall publish notice of any revocation of an approval of an operator in Iris Oifigiúil within 28 days of revocation.

• (7) An operator whose approval has been revoked under these regulations shall cease to operate a relevant system.

• (8) An application under this regulation may be heard otherwise than in public.

32 Withdrawal of Recognition

32. (1) The Minister may withdraw a grant of recognition in all or any of the following circumstances, namely, where—

( a ) a request has been made in that behalf by the operator;

( b ) if the competent authority which approved the operator has withdrawn its approval;

( c ) if the operator—

• (i) has failed to operate a relevant system within 12 months of the date on which recognition was granted, or

• (ii) has failed to operate as a relevant system for a period of more than 6 months, or

• (iii) is being wound up, or

( d ) on any other grounds which seem reasonable to the Minister.

• (2) The Minister shall serve on the operator notice of a proposal to withdraw a grant and shall state the reasons therefor.

• (3) An operator whose grant of recognition is withdrawn pursuant to paragraph 1 (d) may appeal the Minister's decision to the Court.

• (4) On hearing an application under paragraph (3), the Court may confirm or rescind the Minister's decision or make such other ancillary order as it deems fit.

• (5) The operator may apply to the Court and the Court may grant an order providing for such interim or interlocutory relief as it considers appropriate.

33 Compliance order and directions

33. (1) If at any time it appears to the Minister that any requirement of the Schedule to these regulations is not satisfied by an approved operator, or that an approved operator has failed to comply with any obligation under these regulations, the Minister may—

( a ) apply to the High Court for relief, or

( b ) subject to paragraph (3), give to the operator such directions as the Minister thinks fit for securing that the relevant requirement is satisfied or obligation complied with.

• (2) If on any application by the Minister under paragraph (1) (a) the court is satisfied that the requirement is not satisfied or, as the case may be, that the operator has failed to comply with the obligation in question, it may order the operator to take such steps as the court directs for securing that the requirement is satisfied or that the obligation is complied with.

• (3) Before giving a direction under paragraph (1) (b) the Minister shall—

( a ) if circumstances permit, consult with and afford the operator an opportunity to make representations; and

( b ) so far as it is practicable to estimate it, have regard to the cost to the operator of complying with any term of any direction and to the costs to other persons resulting from the operator's compliance.

34 Requests for information from the Operator

34. (1) The Minister may in writing, require an approved operator to provide the Minister with specified information.

• (2) The Minister, may, in writing, require an approved operator to furnish the Minister, at specified times or in respect of specified periods, with specified information, verified in a specified manner, relating to that operator for the exercise of the Minister's functions under these regulations.

• (3) An approved operator who amends, revokes or adds to any rules or guidance shall within seven days given written notice to the Minister of the amendment, revocation or addition.

CHAPTER IV Operation of Automated Transfer and Registration

35 Properly authenticated dematerialised instructions

35. (1) This regulation has effect for the purpose of determining the rights and obligations of persons to whom properly authenticated dematerialised instructions are attributable and of persons to whom properly authenticated dematerialised instructions are addressed when such instructions relate to an uncertificated unit of a security, or relate to a right, benefit or privilege attaching to or arising from such a unit, or relating to the details of a holder of such a unit.

• (2) Where a properly authenticated dematerialised instruction is expressed to have been sent on behalf of a person by a sponsoring system-participant or the operator—

( a ) the person on whose behalf the instruction is expressed to have been sent shall not be able to deny to the addressee—

• (i) that the properly authenticated dematerialised instruction was sent with that person's authority, or

• (ii) that the information contained in the properly authenticated dematerialised instruction is correct; and

( b ) the sponsoring system-participant or the operator (as the case may be) shall not be able to deny to the addressee—

• (i) that he has authority to send the properly authenticated dematerialised instruction, or

• (ii) that he has sent the properly authenticated dematerialised instruction.

• (3) Where a properly authenticated dematerialised instruction is expressed to have been sent by a person and is not expressed to have been sent on behalf of another person, the person shall not be able to deny to the addressee—

( a ) that the information contained in the properly authenticated dematerialised instruction is correct, or

( b ) that the properly authenticated dematerialised instruction was sent.

• (4) An addressee who receives (whether directly, or by means of the facilities of a sponsoring system-participant acting on the addressee's behalf) a properly authenticated dematerialised instruction may, subject to paragraph (5), accept that at the time at which the properly authenticated dematerialised instruction was sent—

( a ) the information contained in the instruction was correct;

( b ) the system-participant or the operator (as the case may be) identified in the instruction as having sent the instruction sent the instruction; and

( c ) the instruction, where relevant, has been sent with the authority of the person on whose behalf it is expressed to have been sent.

• (5) Subject to paragraph (6), an addressee may not accept any of the matters specified in paragraph (4) if at the time of receipt of the properly authenticated dematerialised instruction—

( a ) the addressee was a person other than a participating issuer or a sponsoring system-participant receiving properly authenticated dematerialised instructions on behalf of a participating issuer, and had actual notice—

• (i) that any information contained in it was incorrect;

• (ii) that the system participant or the operator (as the case may be) expressed to have sent the instruction did not send the instruction; or

• (iii) where relevant, that the person on whose behalf it was expressed to have been sent had not given to the operator or the sponsoring system-participant (as the case may be), identified in the properly authenticated dematerialised instruction as having sent it, authority to send the instruction on that persons behalf; or

( b ) the addressee was a participating issuer or a sponsoring system-participant receiving the instruction on behalf of a participating issuer, and

• (i) had actual notice from the operator of any of the matters specified in sub-paragraph (a); or

• (ii) the instruction was an operator- instruction requiring the registration of title in the circumstances specified in regulation 16 (1) (a), (b) or (c); or

( c ) the addressee was an operator and the instruction related to a transfer of units of a security which was in excess of any limit imposed on a sponsoring system participant, by a system-member, in accordance with the rules and procedures of an operator.

• (6) Notwithstanding that an addressee has received in respect of a properly authenticated dematerialised instruction actual notice of the kind referred to in paragraph (5), the addressee may accept the matters specified in paragraph (4) if at the time that the actual notice was received it was not practical for the addressee to halt processing of the instruction.

• (7) A person who is permitted by this regulation to accept any matter shall not be liable in damages or otherwise to any person by reason of having relied on that matter.

• (8) Subject to paragraph (7) this regulation has effect without prejudice to the liability of any person for causing or permitting a dematerialised instruction—

( a ) to be sent without authority; or

( b ) to contain information which is incorrect; or

( c ) to be expressed to have been sent by a person who did not send it.

• (9) For the purposes of this regulation—

( a ) a properly authenticated dematerialised instruction is expressed to have been sent by a person or on behalf of a person if it is attributable to that person; and

( b ) an addressee is the person to whom the instruction indicates it is addressed in accordance with the specifications of the operator.

CHAPTER V Minority Shareholders

36 Notices under section 204 of the 1963 Act

36. (1) This regulation shall apply in relation to any uncertificated units of a security to which a notice given pursuant to section 204 (1) of the 1963 Act relates.

• (2) On receipt of a notice transmitted pursuant to section 204 (5) of the 1963 Act, a company which is a participating issuer shall on the expiration of one month from the date on which this notification was made enter the transferee company in its register of securities as the holder of the uncertificated units of the security to which the notice relates in place of the system-member who was immediately prior to such entry registered as the holder of such units as if it had received an operator-instruction requiring it to amend its register of securities in such manner.

• (3) A company which amends its register of securities in accordance with paragraph (2) shall forthwith notify the operator by issuer-instruction of the amendment.

• (4) In this regulation, "the transferee company" has the same meaning as in section 204 (1) of the 1963 Act.

CHAPTER VI Supplementary and Incidental

37 Evidence of system-entries.

37. (1) Subject to the provisions of this regulation, a copy or reproduction of a system-entry or the relevant part of it in a legible form shall in all legal proceedings be received as prima facie evidence of such entry or record and of the matters and transactions therein entered or recorded.

• (2) A copy or reproduction of a system-entry shall not be received in evidence under this regulation unless it be first proved that the system-entry was at the time of the making of the entry or record one of the ordinary entries or records of the operator or system-participant, as applicable, and that the entry or record was made, supplied or stored in the usual and ordinary course of business, and that the system-entry is in the custody or control of such person. Such proof may be given by a director, secretary or officer of such person, and may be given orally or by an affidavit sworn before any commissioner or person authorised to take affidavits.

• (3) A copy or reproduction of a system-entry which was originally made in legible form shall not be received in evidence under this regulation unless it be further proved that the copy or reproduction has been examined with the original system-entry and is correct. Such proof shall be given by some person who has examined the copy or reproduction with the original entry, and may be given either orally or by an affidavit sworn before any commissioner or person authorised to take affidavit.

• (4) A copy or reproduction of a system-entry which was originally made in non-legible form shall not be received in evidence under this regulation unless it be further proved that where the copy or reproduction was produced by computer, any such computer was operating properly throughout the relevant period, or if not, the circumstances were not such as to affect the reproduction of the system-entry or its contents in legible form and that the information contained in the copy or reproduction reproduces or is derived from information supplied to the computer or computers. Such proof may be given by any person occupying a responsible position in relation to the relevant device or the management of the relevant activities (whichever is appropriate) and may be given orally or by affidavit sworn before any commissioner or person authorised to take affidavits.

• (5) An operator or system-participant or any officer of such person shall not, in any legal proceedings to which such person is not a party, be compellable to produce any system-entry the contents of which can be proved under this regulation, or to appear as a witness to prove the entries, records, matters or transactions therein entered or recorded, unless by an order of a court made for special cause.

• (6) On the application of any party to a legal proceeding a court may order that such party be at liberty to inspect and take copies or reproductions of any entries in a system-entry for any of the purposes of such proceeding. An order under this paragraph may be made either with or without summoning the person who has custody or control of the system-entry or any other party, and shall be served on the person who has custody or control of the system-entry three clear days before the same is to be obeyed, unless the court otherwise directs.

• (7) The costs of any application to a court under or for the purposes of this regulation, and the costs of anything done or to be done under an order of a court made under or for the purposes of this regulation shall be in the discretion of the court, who may order the same or any part thereof to be paid to any party by the person who has custody or control of the system-entry, where the same have been occasioned by any default or delay on the part of such person. Any such order against such person may be enforced as if such person was a party to the proceedings.

• (8) In this regulation—

"legal proceeding" means any civil or criminal proceeding or enquiry in which evidence is or may be given, and includes an arbitration;

"the court" means the court, judge, arbitrator, person or persons before whom a legal proceeding is held or taken;

information shall be taken to be supplied to a computer if it is supplied thereto in any appropriate form and whether it is so supplied directly or (with or without human intervention) by means of any appropriate equipment;