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

where in the ordinary course of business carried on by any individual or body, information is supplied with a view to its being stored or processed for the purposes of that business by a computer operated otherwise than in the ordinary course of that business, that information, if duly supplied to that computer, shall be taken to be supplied to it in the ordinary course of that business;

a document shall be taken to have been produced by a computer whether it was produced by it directly or (with or without human intervention) by means of any appropriate equipment.

SCHEDULE

REQUIREMENTS FOR APPROVAL OF AN OPERATOR

Arrangements and Resources

( b ) The operator's business and corporate structure must be so organised to be capable of being supervised under the regulations to the satisfaction of the Minister.

Financial Resources

Promotion and Maintenance of Standards

Operation of the Relevant System

( a ) shall monitor compliance by the person and that part with the requirements of this Schedule; and

( b ) shall have arrangements to ensure that the person provides such information and such assistance as the operator may require in order to meet obligations under these regulations.

System Security

( a ) so as to minimise the possibility of unauthorised access to or modification of any program or data held in any computer forming part of the operator's system; and

( b ) that each dematerialised instruction is properly authenticated in accordance with the specifications of the operator, which shall provide that each dematerialised instruction—

• (i) is identifiable as being from the computers of a particular system-participant; and

• (ii) is designed to minimise fraud and forgery;

( c ) that each dematerialised instruction, in accordance with the specifications of the operator, expresses by whom it has been sent and, where relevant, on whose behalf it has been sent;

( d ) that each dematerialised instruction, in accordance with the specifications of the operator, indicates—

• (i) where it is sent to a system-participant or the operator, that it is addressed to that system-participant or the operator; and

• (ii) where it is sent to a person who is using the facilities of a sponsoring system-participant to receive dematerialised instructions, that it is addressed to that person and the sponsoring system-participant; and

• (iii) where it is sent to the operator in order to send an operator-instruction to a system-participant, that it is addressed to the operator, to the system-participant and, if the system-participant is acting as a sponsoring system-participant, to the relevant person on whose behalf the sponsoring system-participant receives dematerialised instructions; and

( e ) that the possibility for a system-participant to send a dematerialised instruction on behalf of a person from whom the participant has no authority is minimised.

System Capabilities

( a ) be able to establish that the transferor is likely to have title to or, by virtue of regulation 18 (1), an interest in, such number of units of the security as is in aggregate at least equal to the number to be transferred; or

( b ) be able to notify the participating issuer, in accordance with regulation 17 (1), that the transfer is one of two or more transfers which may be registered in accordance with regulation 17 (2).

( a ) to permit each system-member to obtain a copy of any records relating to the member as are maintained by the relevant system in order to comply with paragraph 7 (a) or 8; and

( b ) to make correcting entries in such records as are maintained in order to comply with paragraph 7 (a) which are inaccurate.

( a ) requiring participating issuers to amend the appropriate registers of securities kept by them; and

( b ) informing settlement-banks of their payment obligations.

( a ) enable a system-member—

• (i) to grant authority to a sponsoring system-participant to send properly authenticated dematerialised instructions on the member's behalf; and

• (ii) to limit such authority by reference to the net value of the units of securities to be transferred in any one day; and

( b ) prevent the transfer of units in excess of that limit.

( a ) to change the form in which they hold or are to hold units of a participating security; and

( b ) where appropriate, to require participating issuers to issue certificates relating to units of a participating security held or to be held by them.

Operating Procedures

( a ) it has—

• (i) received a system-member instruction from the transferor; or

• (ii) been required to do so by a court or by or under an enactment;

( b ) it has—

• (i) established that the transferor is likely to have title to, or is likely to have by virtue of regulation 18 (1) an interest in, such number of units as is in aggregate at least equal to the number to be transferred; or

• (ii) established that the transfer is one of two or more transfers which may be notified to the participating issuer in accordance with regulation 17 (1);

( c ) in the case of a transfer to a system-member for value, it has established that a settlement-bank has agreed to make payment in respect of the transfer, whether alone or taken together with another transfer for value; and

( d ) the transfer is not in excess of any limit which by virtue of paragraph 12 (a) (ii) the transferor has set on an authority given to a sponsoring system-participant.

• (2) A relevant system must comprise procedures which provide that an operator-instruction requiring a participating- issuer to register a transfer of uncertificated units of a security, or informing a settlement-bank of its payment obligations in respect of such a transfer may be generated if necessary to correct an error and if in accordance with the rules and practices of an operator instituted in order to comply with this Schedule.

( a ) received a properly authenticated dematerialised instruction attributable to the system-member having the right, privilege or benefit requiring the operator to generate an operator-instruction to the participating issuer; or

( b ) been required to do so by a court or by or under an enactment.

• (2) A relevant-system must comprise procedures which provide that an operator-instruction to a participating issuer relating to a right, privilege or benefit attaching to or arising from an uncertificated unit of a security may be generated if necessary to correct an error and if in accordance with the rules and practices of an operator instituted in order to comply with this Schedule.

( a ) enable system-users to notify the operator of an error in or relating to a dematerialised instruction; and

( b ) ensure that, where the operator becomes aware of an error in or relating to a dematerialised instruction, appropriate corrective action is taken.

Rules and Practices

( a ) must bind system-members and participating issuers—

• (i) so as to ensure the efficient processing of transfers of title to uncertificated units of a security in response to operator-instructions; and

• (ii) as to the action to be taken where transfer of title in response to an operator-instruction cannot be effected;

( b ) must make provision for a participating issuer to cease to participate in respect of a participating security so as—

• (i) to minimise so far as practicable any disruption to system-members in respect of their ability to transfer the relevant security; and

• (ii) to provide the participating issuer with any relevant information held by the operator relating to uncertificated units of the relevant security held by system-members;

( c ) must make provision for the orderly termination of participation by system-members and system-participation whose participating is disruptive to other system-members or system-participants or to participating issuers; and

( d ) if they make provision for the designation of a subsidiary undertaking as a relevant nominee, must require that the relevant nominee maintain adequate records of—

• (i) the names of the persons who have an interest in the securities it holds; and

• (ii) the nature and extent of their interests,

( a ) that each system-participant is able to send and receive properly authenticated dematerialised instructions:

( b ) that each system-member has arrangements—

• (i) for properly authenticated dematerialised instructions attributable to the member to be sent;

• (ii) for properly authenticated dematerialised instructions to be received by or for the member; and

• (iii) with a settlement-bank for payments to be made, where appropriate, for the units of a security transferred by means of the relevant system;

( c ) that each participating issuer is able to respond with sufficient speed to operator- instructions.

GIVEN under my Official Seal, this 22nd day of March, 1996.

PAT RABBITTE,

Minister of State at the Department of Enterprise and Employment.

EXPLANATORY NOTE.

These Regulations make provision for the transfer without a written instrument, and the evidencing otherwise than by a certificate, of title to a unit of a security, in accordance with a computer-based system and procedures known as the "relevant system". The relevant system centres on a person known as the "operator". The legal framework underlying the operation of the relevant system, together with the criteria which the operator and the relevant system must meet, are enshrined in these Regulations.

Chapter I, inter alia, sets out the purpose and definitions in the Regulations. A unit of a security which may be transferred by means of the relevant system is referred to as an "uncertificated unit". A security, the units of which may become uncertificated, is referred to as a "participating security". An issuer which issues a participating security is, in relation to that security, referred to as a "participating issuer". Instructions sent by means of the relevant system are referred to as "demateralised instructions".

Chapter II mainly provides for a range of matters relating to transfers of title to securities (including transfer of uncertificated holdings, transfer from uncertificated to certificated holdings and vice-versa) through a dematerialised system, the recording and registration of such transfers and the obligations imposed on participating issuers in regard to this and certain other matters.

Chapter III provides for the approval of an operator or recognition of an operator already approved by a competent authority of a Member State of the EU, by the Minister and associated matters. Provision is also made for the Minister to delegate his approval and supervisory functions under Chapter III to a designated body, if he so wishes.

Chapter IV makes provision to prevent persons sending dematerialised instructions, and persons on whose behalf they are sent, denying particular matters relating to them. It also makes provision for persons receiving such instructions to accept with certain exceptions, that the information contained in them and matters relating to them are correct.

Chapter V makes provision for certain notices to be issued in respect of minority shareholdings resulting from a take-over situation.

Chapter VI contains certain supplementary and incidental provisions designed to overcome evidential problems which may arise in relation to system entries.

The Schedule to the Regulations sets out the requirements for approval and continuing operation of a person as an operator.