The Uncertificated Securities Regulations 1992

• (c) the security concerned; and

• (d) the number of entitlements concerned.

• (2) In the case of a commercial controller, paragraph (1) is subject to any agreement between the controller and his or its account holder.

• (3) It is the duty of a controller to give effect to an instruction received under this regulation by expressly re-allocating the entitlement as being held for the person specified by amending his or its record of account holders accordingly, provided that:

• (a) the controller holds sufficient entitlements to units of the security for the instructing account holder, which he or it has not previously consented to the transfer of and which have not been the subject of instructions under this regulation, to enable him or it to comply in full with the instruction; and

• (b) he or it has authority to hold the entitlements for the person specified.

This paragraph is without prejudice to the provisions of Chapters II to IV of Part VI of these Regulations.

• (4) Upon a controller entering, under paragraph (3), the name of a person into a record of account holders as the person for whom an entitlement is held, the controller shall thereupon hold the entitlement for that person (who accordingly is thereupon the account holder with respect to the entitlement) in place of the person giving the instruction, notwithstanding that the controller may have neglected to make the corresponding amendment to the entry of the latter.

• (5) In the case of one among two or more primary company controllers or an alternative company controller, if the controller, having received an instruction under this regulation, is not able to give effect to the instruction solely because he or it has no authority to hold entitlements for any person specified, he or it shall notify a transaction to (in the case of a primary company controller) the company or (in the case of an alternative company controller) the Operator for the entitlement or entitlements concerned to be transferred to a primary company controller which is so authorised and instruct that controller to hold the entitlement for the person specified.

Conditional instructions by way of security (England and Wales and Northern Ireland)

34

• (1) This regulation shall have effect so as to facilitate the giving of a security interest over units of a security under the law of England and Wales or Northern Ireland.

• (2) Without prejudice to any other circumstances in which a conditional instruction may be issued to a controller, an account holder may, in order to give security for any obligation, issue an instruction to a controller to hold an entitlement for another person (which may be the controller) under regulation 33(1) on terms that the instruction:

• (a) is conditional upon being confirmed by the person specified in the instruction; and

• (b) is to cease to have effect if that person cancels it but is otherwise irrevocable as between the controller and the account holder.

• (3) A controller shall acknowledge the receipt of such an instruction to the account holder and the person specified in the instruction, giving the date of its receipt.

• (4) Where a commercial controller has received such an instruction but the instruction has not yet been confirmed or cancelled, the controller shall not issue any communication on behalf of the account holder to the company or any other person in repsect of the entitlements subject to the instruction unless he or it has given 10 working days prior notice to the person specified in the instruction.

• (5) A commercial controller:

• (a) may agree with an account holder that he or it will not receive instructions under this regulation; and

• (b) shall not accept an instruction under this regulation unless he or it is authorised to hold any entitlemenmt concerned.

This regulation is also subject to any agreement between such a controller, an account holder of that controller giving an instruction under this regulation and any person specified in the instruction.

• (6) An instruction given under paragraph (1) shall be regarded, for the purposes of any provision of these Regulations, as being an instruction under regulation 33(1), notwithstanding its conditional nature.

A person giving such an instruction shall be regarded as the account holder with respect to any entitlement concerned until the insruction has been confirmed and acted upon.

PART V — REGISTRATION AND THE APPROPRIATE REGISTER

CHAPTER I — Registration and Controllers

Controller’s duty to issue proper instructions

35

• (1) If a controller held, or holds, an entitlement to a unit of a security at a date:

• (a) being a fixed register date of the company concerned; or

• (b) specified in a general call for instructions,

it is his or its duty to issue a proper instruction to register with respect to the entitlement (unless there was, or (as the case may be) is, a standing instruction extant with respect to the entitlement to which regulation 36(1) does not apply).

• (2) Where a controller has failed to issue a proper instruction to register with respect to any entitlement for a periodic update of the appropriate register, the company shall register the controller’s default nominee as holder of the unit to which the entitlement relates.

Having registered a default nominee under this paragraph, the company shall notify the controller concerned of the registration as soon as reasonably practicable.

Controller’s duty to cancel standing instructions to register or transfer

36

• (1) Where a contgroller has issued a standing instruction to register a person as holder of a unit of an uncertificated security, it is his or its duty to notify the company if the entitlement concerned ceases to be held by him or it for that person.

• (2) Such a notification shall be issued as soon as reasonably practicable after the entitlement is no longer so held.

• (3) Upon receipt of such a notification, the company shall treat the standing instruction as no longer extant or, where the standing instruction relates to other entitlements not covered by the notification, as no longer extant to the extent of the entitlements covered by the notification.

Multiple instructions by controllers

37

• (1) Subject to the provisions of this regulation, a company shall not register a person as holding a unit of any uncertificated security in response to a proper instruction to register if the controller which has issued the instruction has, for the purposes of the periodic update of the register in question, purportedly issued such instructions with respect to more units of the security than there were entitlements held by that controller in respect of the security on the date by reference to which the register is to be updated.

• (2) However before a company may refuse to register a person under paragraph (1) it must first have taken such steps as are reasonably practicable, if any, to call (in the case of a commercial or alternative company controller by means of a valid communication) for further proper instructions to register with respect to the entitlements held by that controller on the date by reference to which the register is to be updated.

Consequences of refusal of registration

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• (1) Where a company refuses for any reason to register on the appropriate register a person as a holder of a unit of an uncertificated security in response to a proper instruction to register, it shall instead register, as the holder, the default nominee of the controller that issued the proper instruction to register that person.

• (2) Having registered a default nominee under this regulation, the company shall notify the controller concerned of the registration as soon as reasonably practicable.

Amendment of particulars

39

• (1) A controller shall, by issuing an instruction to a company, amend the particulars set out in any proper instruction to register issued by him or it with respect to the name or address of the person registered or to be registered as holder if it is provided with appropriate evidence that there has been a change of the holder’s name or address.

• (2) A company may amend the appropriate register so as to reflect an instruction amended under this regulation other than at a periodic update of the register, if the instruction amended has already been acted upon.

• (3) A company need not give effect to an instruction as amended under this regulation if the amending instruction is received so close to a periodic update of the register that it is not reasonably practicable to have regard to it.

Company to inform persons of controllers holding entitlements

40

Where an application is made in writing to a company by any person who provides satisfactory evidence that, by reason of proceedings (whether administrative or judicial) in contemplation or being taken with respect to a unit of a security of the company registered in the name of a specified holder, the person has reason to know the name and address of the controller that has instructed the registration of the holder, the company shall provide that information to the applicant as soon as reasonably practicable, together (where the contgroller is a company controller) with any address for service on that controller set out in the list maintained under regulation 9.

CHAPTER II — Maintenance of the Appropriate Register

Maintenance of the appropriate register

41

• (1) A company having in issue an uncertificated security shall maintain the appropriate register for that security in accordance with the provisions of this Chaptger of this Part of these Regulations.

• (2) The appropriate register for an uncertificated security shall be made up periodically and not, subject to regulations 39, 42, 72, 73 and 78, continuously.

Accordingly, subject to those regulations, no proper instruction to register received by a company may be given effect to other than at a periodic update of the appropriate register.

• (3) A periodic update of an appropriate register for an uncertificated security shall be carried out:

• (a) after each general call for instructions; and

• (b) after each fixed register date of the company.

In each case the register shall be made up from the proper instructions to register the company has received in response to the general call or with respect to the fixed register date, together with any standing instructions that are extant.

• (4) A periodic update of an appropriate register for an uncertificated security shall take the form of the preparation of a new version of the register; the new version shall supersede the old version of the register with effect from the completion of the update (and not with effect from any earlier date).

• (5) Notwithstanding the provisions of any other regulation, a company shall not update an appropriate register under this regulation unless, at the date by reference to which the register is to be updated, the sum of the entitlements recorded on the operator’s and company’s records of entitlements reconciled with the total number of units of the relevant security then in issue or the records have been made to so reconcile as at that date by their amendment under regulations 72 and 73.

Transfer where transferor identified

42

• (1) Notwithstanding regulation 41, a company may amend the appropriate register for an uncertificated security other than at a periodic update if it is in receipt of a proper instruction to register in respect of a unit of the security which in addition identifies the person currently registered as holder of the unit concerned.

• (2) However no such instruction may be acted upon by the company unless it has been issued by the same controller as issued the instruction to register the current holder.

• (3) Subject to regulation 21(2), a company shall so amend the register if it is in receipt of such an instruction and the registered holder concerned is the default nominee of the instructing controller registered in that capacity; such an amendment is to be made as soon as is reasonably practicable after receipt of the instruction.

Register events

43

• (1) Where:

• (a) the appropriate register for an uncertificated security is to be utilised to determine a matter listed in Schedule 3 to these Regulations against a security of the kind in qustion; and

• (b) that matter is to be determined by reference to the appropriate register as it stands on a specified date,

it is the duty of the company (or, as the case may be, the directors of the company), if practicable, to use for the purpose a version of the appropriate register that has been updated by reference to a date not more than 5 days prior to the specified date.

• (2) The use of the appropriate register to determine a matter listed in Schedule 3 in circumstances where paragraph (1) applies is known in these regulations as“a register event”.

Fixed register dates

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• (1) There shall be, for every uncertificated security, at least one day in every period of five weeks by reference to which the appropriate register for that security is to be updated under these Regulations, known in these Regulations as a“fixed register date”.

• (2) The fixed register dates for a security shall be agreed for each period of six calendar months between the Operator and the company concerned (or, failing such agreement assigned by the Operator to the company), at least 5 working days in advance of the start of the period.

• (3) The fixed register dates so agreed or assigned for a period shall be published by the comapny in such form as the company reasonably considers is calculated to bring the dates to the notice of those persons likely to be interested in them.

• (4) Notwithstanding that a fixed register date has been so agreed or assigned, that date shall be treated as cancelled if the company has issued a general call for instructions by reference to a date within 5 working days either side of the fixed register date and notifies the Operator, prior to receiving proper instructions to register with respect to the fixed register date, that it does not wish to receive such instructions.

General calls for instructions

45

• (1) A company may issue at any time a general call for instructions specifying a date by reference to which it proposes to update the appropriate register for a security.

A date specified in a general call shall be a date prior to the date on which the general call is issued, but may not be a date prior to the last date by reference to which the appropriate register was updated.

• (2) The general call shall be issued:

• (a) to each commercial and alternative company controller which held entitlements on the date specified (other than a controller which issues only standing instructions to register), by means of the Operator’s part of the system; and

• (b) to each primary company controller, in such form as may be agreed between the company and the controller or, failing such agreement, in writing.

Right of controllers to trigger general call for instructions

46

• (1) A company shall, having received a requisition by one or more controllers under this regulation, forthwith issue a general call for instructions with respect to a security.

• (2) A requisition under this regulation may be given by one or more controllers provided that in doing so they rely upon entitlements held by them amounting in number, at the date the requisition is made, to one tenth or more of the units of the security in question than in issue.

• (3) It is the duty of a controller to make, or join in, a requisition under this regulation in reliance on an entitlement held by him or it if, but only if, he or it has been instructed to do so by the account holder for whom the entitlement is held.

• (4) A requisition under this regulation must be signed by each of the requisitionists by a person authorised by him or it to do so, and is made when deposited at the company’s registered office.

CHAPTER III — Winding Up

Commencement of winding up

47

• (1) This regulation applies from the commencement of the winding up, within the meaning of the Insolvency Act 1986, of a company which has in issue an uncertificated security and for as long as any winding up proceedings under that Act may subsist.

• (2) An appropriate register for an uncertificated security of the company may only be updated (whether periodically or otherwise), or otherwise amended, with (in the case of a voluntary liquidation) the consent of the liquidator of the company or (in the case of a compulsory winding up) the court seised of the winding up proceedings in relation to the company.

Where an appropriate register has been updated or amended without such consent, the update shall be void save and to the extent it is ratified by (in the case of a voluntary liquidation) the liquidator or (in the case of a compulsory winding up) the court seised of the winding up proceedings in relation to the company.

• (3) Regulations 43 to 46 shall not apply.

PART VI — UNCERTIFICATED SECURITIES

CHAPTER I — Uncertificated Securities: General Provisions

Exclusion of enactments and rule of law

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• (1) A company shall not be under any obligation (if it otherwise would be) to issue any certificate evidencing the title to a unit of an uncertificated security of the company and in particular section 185 of the 1985 Act shall not apply to a company to the extent that it has uncertificated shares.

• (2) Subject to paragraph 4 of Schedule 5 to these Regulations, any certificate issued by or on behalf of a company purportedly evidencing the title to a unit of an uncertificated security of the company shall not be (if it woud otherwise be)prmia facie evidence, and in Scotland sufficient evidence unless the contrary is shown, of the title to the unit and in particular section 186 of the 1985 Act shall not have effect in relation to any certificate issued with respect to uncertificated shares.

• (3) No rule of law to the effect that, in a contract to transfer the title to units of a security, it is a term that the transferor shall execute and deliver to the transferee a proper instrument of transfer and a certificate evidencing the rights and interests liable to be conveyed (or obtain a certification of the transfer from any person) shall apply with respect to units of an uncertificated security.

Implied terms in contracts for the transfer of uncertificated securities

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• (1) It is an implied term in a contract for the transfer of a unit of an uncertificated security that:

• (a) any authority, instructions or notifications of transactions necessary for the effecting of the transfer will be given by the transferor or by persons acting on behalf of the transferor; and

• (b) the controller to hold any entitlements concerned for the transferee is to be a company controller.

• (2) A term implied into a contract by this regulation may be excluded or varied expressly or, where the contract makes alternative provision, impliedly.

For this purpose a contract may make alternative provision expressly or by implication.

Trustees holding units of an uncertificated security

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• (1) A provision in any instrument or enactment which authorises:

• (a) the holding and investment of trust property in units of a security; or

• (b) the variation of investments in units of a security comprising trust property,

shall be deemed to authorise investment of trust property in units of any uncertificated security which, if the security had been in certificated form, would have been an authorised investment for the purposes of the provision or rule of law.

• (2) Paragraph (1) shall be without prejudice to:

• (a) any other condition which is imposed by the instrument, enactment or rule of law relating to the investment of trust property in units of a security; and

• (b) any express provision of any instrument which prohibits the investment of trust property in units of an uncertificated security.

• (3) Any provision of any instrument or enactment or any rule of law relating to the employment of agents by trustees shall not be taken as precluding the holding of, or investment of trust property in, units of an uncertificated security by virtue only of the reason that the power to transfer the units is under these Regulations held for the trustees by a controller and a trustee shall not be answerable for the insufficiency or deficiency of any securities or any income threrfrom, or for any other loss due to the acts, neglects or defaults of the controller unless the same happens through the trustee’s own wilful default or neclect.

• (4) For the purpose of this regulation“trustee” (in England and Wales and Northern Ireland) shall include a personal representative and any other person acting in a fiduciary capacity and (in Scotland) any person who is a trustee for the purposes of the Trusts (Scotland) Act 1921[^f00013] and“trust peropery” shall include all property held by persons acting in such capacities.

CHAPTER II — Transmission by Operation of Law

Transmission &c by operation of law

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• (1) This regulation applies where:

• (a) the affairs of an account holder are, by or under any enactment or Order of a court of competent jurisdiction or (without prejudice to the foregoing) by virtue of the appointment of a receiver of any description, being managed by or are subject to the control of another (the“manager”) (whether generally or to the extent of any entitlements held for that account holder by a controller) and the consent of the manager is, by or under the enactment or Order, required to the transfer of units of a security held by the account holder;

• (b) the rights of an account holder to enforce the duties of the controller owed to that account holder have become vested in another (“the successor”) by operation of law;

• (c) by or under any enactment or Order of a court of competent jurisdiction or any rule of law, the title to a unit of an uncertificated security, or the right to transfer the unit or be registered with it, has devolved upon, is vested in, or has been transmitted to or otherwise howsoever become held by a person (“the succerssor”) by operation of law; or

• (d) (in the case of shares) by or under the company’s memorandum and articles of association or (in the case of any securities) by the terms of issue of the security, the right to transfer a unit of a security has become vested in a person (“the successor”)

any such circumstances being referred to below as a“relevant circumstance”.

• (2) A controller, having received actual notice of a relevant circumstance affecting an entitlement held by him or it or a unit of an uncertificated security the entitlement to which is held by him or it (together referred to below as“an affected entitlement”) is under a duty not to consent to any transfer of an affected entitlement or to act upon any instruction to hold such an entitlement for another or otherwise act in relation to such an entitlement without the consent of the manager or successor or upon the instructions of the successor.

This paragraph shall not be construed as invalidating, or requiring any such consent for, an instruction received by the controller prior to receiving such actual notice, provided that the instruction has by then been acted upon by the controller or is otherwise irrevocable.

• (3) A controller shall, however, having received such notice continue to regard the person for whom an affected entitlement is or has been held as the account holder with respect to that entitlement (even though a person (if an individual) is dead or (if a body of persons corporate or unincorporate) has been dissolved), in particular by continuiing to instruct the registration of that person when he or it is required to issue proper instructions to register under the system, until he or it receives an instruction with respect to the entitlement from the successor under the following provisions of this regulation or (as the case may be) a notification from the manager under paragraph (7).

Accordingly, if a commercial controller is no longer authorised to hold entitlements for the account holder after receipt of actual notice of a relevant circumstance, regulation 13(1) and (2) shally not apply.

• (4) The procedures set out in paragraphs (5) and (6) may be followed in order that a successor may become registered as the holder of a unit to which an affected entitlement relates or otherwise transfer it or deal with the affected entitlement.

• (5) A successor may instruct the controller to hold an affected entitlement for the successor or may give such insruction with respect to a transfer of the entitlement or the holding of the entitlement for another as if the successor were the account holder with respect to the entitlement (in the case of a commercial controller as if there were no agreement under regulation 13(1)) and the instruction shall have effect accordingly.

• (6) Subject to paragraph (7), a controller need not give effect to an instruction under paragraph (5), unless he or it has received such evidence as the controller may reasonably require of the relevant circumstance; in particular he or it may require production of the following:

• (a) where an enactment or Order of a court constitutes the relevant circumstance, a copy of the enactment or an office copy of the Order; and

• (b) where the title to a unit of an uncertificated security or the rights of an account holder to enforce the duties of a controller has or have devolved as a rfesult of the death of a person, any document:

• (i) which (in England and Wales or Northern Ireland) is by law sufficient evidence of probate or the will, or letters of administration of the estate, or confirmation as executor, of a deceased person having been granted to the successor;

• (ii) which (in Scotland) is by law sufficient evidence of confirmation as executor of a deceased person having been granted to the successor with respect to the rights of the person against the controller in connection with an entitlement or to a unit of an uncertificated security, the entitlement to which is held by the controller.

• (7) A manager shall notify the controller if the affairs of the account holder have ceased to be under his management or control.

• (8) Unless on actual notice to the contrary with respect to a particular purported instruction, a company controller shall be entitled and bound to act upon an instruction issued by means of the Operator’s part of the system with respect to an affected entitlement as being issued with the authority of the successor by an approved person and the successor shall be bound accordingly, provided that the successor has, prior to the controller’s receipt of the instruction, given the controller such evidence as the controller may reasonably require of the relevant circumstnace (including any matter referred to in paragraph (6)(a) or (b)).

• (9) Where instructions have been received by a controller from an account holder prior to the controller receiving actual notice of a relevant circumstance, the controller may, notwithstanding any provision of this regulation, act on those instructions if, as a result of the manner in which communications received by the controller are processed, it is not practicable for the controller to halt the processing of the instruction.

• (10) Subject to paragraph (11) paragraphs (1) to (9) shall (so far as applicable) apply with any necessary modifications where a relevant circumstance occurs in respect of a person amongst two or more persons acting jointly who are together an account holder or jointly registered as the holder of a unit of an uncertificated security.

• (11) This paragraph applies where an entitlement held by a controller is held for two or more persons acting jointly and the controller receives actual notice of the vesting, by operation of law, of the unit of an uncertificated security to which the entitlement relates, or otherwise the rights of those persons to enforce the duties of the controller, in the survivor or survivors of thos persons.

The controller shall hold the entitlement for the survivor or survivors who shall be the account holder with respect to the entitlement.

• (12) In this regulation“enactment” includes, in relation to paragraph (1)(a) and (c), any legislation in any country which is effective to achieve the circumstances therein referred to.

• (13) This regulation is subject to regulation 53.

CHAPTER III — Injunctions, Intedicts and other Orders

Injunctions, interdicts and other Orders

52

• (1) This regulation applies where in, or in connection with, any judicial proceedings before a court of competent jurisdiction (whether or not in the United Kingdom) an injunction, interdict, charging order, warrant for arrestment or other Order (all referred to in the regulation as an“Order”) is made (and if necessary served) which has the effect of:

• (a) restraining the transfer of a unit of an uncertificated security by a person; or

• (b) restraining any dealing by a person in connection with an entitlement to a unit of a security held for a person.

This regulation applies (if the Order so applies) whether or not the Order relates to units or entitlements held by or for the person at the date of the Order.

• (2) Where a controller receives actual notice of such an Order relating either to a unit of a security the entitlement to which is held by him or it or to an entitlement held by him or it, the controller shall be under a duty (notwithstanding any other provision of these Regulations and in addition to any other effect such notice may have) not to do any act which would have the effect of frustraing the effect of the Order or which is otherwise inconsistent with its terms and in addition to do any act which is open to it under the system (by way of withdrawal of any consent to a transfer of the entitlement or otherwise), to prevent the Order being so frustrated or the occurrence of curcumstances inconsistent with its terms.

• (3) No such Order shall however have effect to the extent that it would prevent a periodic update of the appropriate register for an uncertificated security under these Regulations; in particular it shall not require a comapny to maintain the registration of a person as the holder of a unit where the company has no proper instruction to register that person as holder of the unit.

• (4) Where instructions have been received by a controller from an account holder prior to the controller receiving actual notice of such an Order, the controller may, notwithstanding any provision of this regulation, act on those instructions if, as a result of the manner in which communications received by the controller are processed, it is not practicable for the controller to halt the processing of the instruction.

• (5) This regulation is subject to regulation 53.

CHAPTER IV — Restrictions Avoiding Transfer

Restrictions avoiding the transfer of title to securities arising from an enactment

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• (1) This regulation applies where there exists a restriction (other than a restriction resulting from the winding up of the company which has issued the security concerned) on the transfer of the title to a unit of an uncertificated security (“the restricted unit”) held by an account holder (“the affected holder”) arising by virtue of the provisions of any enactment (including any enactment relating to insolvency), or an Order of a court of competent jurisdiction, to the extent that it has the effect of avoiding (whetherab initio or subsequently) a transfer of a unit of a security not in accordance with the terms of the restriction.

• (2) Nothing in these Regulations shall be construed as rendering valid a transfer of a restricted unit which has been so avoided and the enactment or Order shall, where a transfer has been so avoided, in addition have the effect of prohibiting an entitlement held for the affected holder being held for another person where this would have the effect of causing the registration of a person other than the affected holder in respect of a restricted unit.

• (3) Subject to the following provisions of this regulation, upon receiving actual notice that a unit of an uncertificated security is a restricted unit, it is the duty of the Operator and the controller which instructed the registration of the affected holder as holder of the restricted unit (“the registering controller”) to take such steps as may be appropriate and practicable (to take precedence, in the case of a controller, over any other duty of his or its under these Regulations) to prevent any act prohibited under paragraph (2).

• (4) Without prejudice to regulation 73, where the registering controller is unable to continue to issue a proper instruction to register an affected holder in respect of a restricted unit, or is or was required to cancel a standing instruction to register to that effect, as a result of a transfer of an entitlement, any transferee of that entitlement shall, upon receiving actual notice of the circumstances, be under a duty (notwithstanding any other provision of these Regulations) to hold the entitlement for the effected holder or issue a notification of a transaction whereby the entitlement is transferred back to the registering controller to be held for the affected holder.

• (5) A registering controller shall, once he or it has received actual notice of the circumstances, be deemed to hold an entitlement held by him or it to a restricted unit for the affected holder, notwithstanding any instructions which the controller has received under regulation 33, even if he or it has acted upon the instruction by expressly re-allocating the entitlement to another.

• (6) Notwithstanding that a proper instruction to register may not be effective to transfer the title to a unit of a security by reason of an enactment or Order to which this regulation applies, a company shall be entitled and bound to act upon a proper instruction to register a person as holder of a unit of a security, unless the company has actual notice that the entitlement concerned is to a restricted unit and an identified person other than the affected holder is the subject of the instruction.

Where a company has acted on a proper instruction to register under this paragraph, it shall not be liable in any civil or criminal proceedings solely by reason of the fact that it treated a person registered by it as the holder of the unit of a security concerned (and, in the case of shares, as a member) unless the company had, at the relevant time, actual notice that the entitlement concerned was to a restricted unit.

• (7) Where instructions have been received by a controller from an account holder prior to the controller receiving actual notice that an entitlement concerned is to a restricted unit, the controller may, notwithstanding any provision of this regulation, act on those instructions if, as a result of the manner in which communications received by the controller are processed, it is not practicable for the controller to halt the processing of the instruction; this paragrph is otherwise without prejudice to paragraphs (4) and (5).

PART VII — FURTHER PROVISIONS WITH RESPECT TO THE OPERATOR, CONTROLLERS, AND OTHER PARTICIPANTS

Operator’s management of the system

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• (1) Notwithstanding any other provision of these Regulations, the Operator is not obliged to transmit through the Operator’s part of the system or otherwise act upon a communication received by it which it is satisfied is obviously erroneous.

• (2) The Operator may refuse to transmit a proper instruction to register or other communication to a company if the proper instruction or other communication has been superseded by a later instruction or communication or, in the case of a proper instruction to register, it (together with other instructions to register issued at the same time) would have the effect of updating the register by reference to an earlier date than that achieved by proper instructions which have already been issued.

• (3) The Operator may, by notice to a company and all controllers holding entitlements to units of a security of the company (other than any controller which issues only standing instructions to register), cancel a fixed register date in respect of the security (whether before or after the date, but prior to the issue of any limited instructions to register in respect of it) if, in the opinion of the Operator, the giving of any proper instructions to register by reference to that date, having regard to any general call for instructions that has been or is likely to be made, would be likely to have the effect of updating the appropriate register by reference to an earlier date than that achieved by proper instructions issued or to be issued in response to the general call.

Communications effected by the Operator’s part of the system or by the Operator

55

A recipient of any communication made by means of the Operator’s part of the system or from the Operator acting as agent for a participant shall be entitled and bound to treat the communication as being issued by the person it purports to be issued by or (as the case may be) as having been transmitted by the Operator with the authority of the participant the communication purports to be on behalf of and the person or (as the case may be) the participant shall be bound by the communication accordingly. This regulation is without prejudice to the liability of the Operator or any other person concerned for the making of a communication without authority.

Lists of commercial controllers and approved persons

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• (1) It is the duty of the Operator to maintain a list of commercial controllers which, for each such controller, sets out:

• (a) the name of the controller;

• (b) (where the Operator maintains its record of entitlements by using codes as permitted by regulation 70) the code allocated to the controller by the Operator;

• (c) (if a body corporate) the address of its registered office;

• (d) (if a body corporate) the country of its incorporation;

• (e) (if an individual or unincorporated body of persons) the address of his or its principal place of business;

• (f) the name and address of any persons appointed under regulation 95(2) to accept service of process on the controller’s behalf or otherwise the place in each jurisdiction upon which such service may be effected in connection with the performance of his or its functions under these Regulations; and

• (g) the name and address of the controller’s default nominee,

and to provide a copy of the list to any person upon request.

• (2) A commercial controller shall notify the Operator of any change in the particulars listed with respect to him or it in the list maintained under paragraph (1) which are required by sub-paragraphs (a), (c) to (e) or (g) of that paragraph and may notify the Operator where he or it wishes to amend the particulars given in the list in respect of sub-paragraph (f) thereof. The Operator shall amend the list as soon as practicable after receipt of any such notice.

• (3) The Operator shall in addition maintain a list of persons it has admitted to perform the functions of an approved person, giving:

• (a) the name of the person;

• (b) (if a body corporate) its country of incorporation and the address of its registered office;

• (c) (if a partners up or an individual) his or its principal place of business; and

• (d) the name and address of any persons appointed under regulation 95(2) to accept service of process on the person’s behalf or otherwise the place in each jurisdiction upon which such service may be effected on the person in connection with the performance of the person’s functions under these Regulations.

The Operator shall provide a copy of the list to any person upon request.

• (4) It shall be the duty of an approved person, where there has been a change in the particulars listed by reason of paragraph (3)(a) to (c) with respect to him or it in the list maintained by the Operator under paragraph (3), to notify the Operator as soon as reasonably practicable of the change; an approved person may notify the Operator where he or it wishes to amend the particulars given in the list by reason of paragraph (3)(d). The Operator shall amend the list as soon as reasonably practicable after receiving such a notice.

• (5) Section 352(5) of the 1985 Act shall apply to a default in complying with the pro-visions of paragraphs (1) and (3) and the second sentence of paragraphs (2) and (4) as it applies with respect to a default in complying with section 352 of that Act, subject to the modification that references to “a company” or “the company” are to be treated as references to the Operator.

Duty of participants acting on behalf of others

57

It is the duty of any participant making a communication purportedly on behalf of another person by means of a valid communication to do so only with the authority of that person.

Appointment of agents

58

Nothing in these Regulations shall be taken as prohibiting the appointment by any person of any agent to perform any functions of that person under these Regulations (or to make any communication on the person’s behalf) and:

• (a) references in these Regulations to a person shall include an agent of the person;

• (b) references to any communications to or from a person shall include a reference to communications to or from an agent acting on behalf of the person.

• For the avoidance of doubt, the appointment of an agent to perform a person’s functions under these Regulations shall not relieve the person from any liability arising from their performance or non-performance.

Persons acting in more than one capacity

59

• (1) Nothing in these Regulations (other than regulation 61(1)) shall prohibit a person combining two or more rules recognised by these Regulations.

• (2) In particular:

• (a) a person may combine two or more of the following rules: primary company controller, alternative company controller, registrar of the appropriate register, keeper of the company’s record of entitlements and commercial controller;

• (b) a company may act as its own company controller and, if it carries on the business of being a commercial controller, hold entitlements as commercial con-troller in units of its own securities.

• (3) Nothing in these Regulations shall be construed as requiring that a person combining two or more roles is actually to send any communications to himself or itself, but otherwise these Regulations shall apply as if the roles were performed by different persons, so that (in particular) any knowledge held by a person in his capacity as a person per-forming one role shall not be imputed to the person in his capacity as a person performing another role.

Bodies corporate, partnerships and individuals as controllers

60

• (1) Where a commercial controller, being a body corporate is dissolved or being an individual dies, any entitlements held by him or it shall be treated as still being held by him or it until transferred by the Operator under regulation 14. Where a company controller, being a body corporate is dissolved or being an individual dies, any entitlements held by him or it shall be treated as still being held by him or it until transferred by the Operator or (as the case may be) the company under regulation 12 and Schedule 1.

• (2) In the case of a partnership, any entitlement held by the controller shall be held by the partnership and not the partners. If the partnership ceases the entitlement shall, unless the partnership is a commercial controller and another commercial controller succeeds to the relevant business, continue to be regarded as being held by the partnership until transferred under regulation 12 and Schedule 1 or regulation 14; but if the partnership is a commercial controller and another commercial controller succeeds to the relevant business, the entitlements shall be held by that commercial controller and any instructions received by the former partnership shall be treated as instructions received by the commercial controller to the extent that satisfactory evidence of them is obtained by the commercial controller and the commercial controller is satisfied that the number of entitlements held is established.

• (3) Unless the recipient has actual notice to the contrary, a valid communication purportedly issued by a person recorded as being a controller holding entitlements on a record of entitlements shall be deemed to be issued by that person, even if it transpires that that person did not exist or was dead at the time the message was issued.

Controller’s default nominee

61

• (1) It is the duty of a controller:

• (a) to appoint a relevant person (other than himself or itself) to act as his or its “default nominee” for the purposes of these Regulations (that is to say as the person to be registered as the holder of units of a security to which the controller holds entitlements where the controller has failed for any reason to issue a proper instruction to register with respect to the units or such an instruction has not been acted upon for any reason by the company); and

• (b) to notify every relevant company of the name and address of the person so appointed (unless the Operator has agreed to communicate, or has communicated, this information to the company on behalf of the controller).

For the purposes of sub-paragraph (a) a “relevant person” is a body corporate whose sole business is holding property of any description on behalf of others.

• (2) The registration of a default nominee, in its capacity as such, as the holder of a unit of an uncertificated security shall not cause the relevant entitlement to be held for the default nominee or the default nominee to be regarded as the account holder with respect to it.

• (3) A controller’s default nominee, having been registered on an appropriate register as the holder of a unit of an uncertificated security in that capacity, shall hold that unit on trust:

• (a) (in the case of its registration under regulation 38 as a consequence of the pro-visions of regulation 21) for the account holder who has been refused registration, until another person is registered as the holder of the unit; or

• (b) (in any other case) for the account holder who ought to be registered as holder of the unit, until such time as that account holder has been registered as the holder.

• (4) A default nominee shall, in connection with a unit of an uncertificated security held on trust by it in its capacity as default nominee, act, and only act, in accordance with the instructions of the account holder on whose behalf it holds the unit.

• (5) A default nominee shall not accept instructions from such an account holder except where the instruction is given on behalf of the account holder by the controller concerned or the instruction is given with the consent of the controller. It is the duty of the controller to give such instructions if, but only if, he or it has the like instructions from the account holder concerned.

• (6) Subject to any provision to the contrary (in the case of shares) in a company’s articles of association or (in the case of any type of security) in the terms of issue of a security, where a controller’s default nominee is registered in that capacity as the holder of a unit of a security, the default nominee is prohibited from exercising any voting right attached to the unit and any purported exercise of such a right in contravention of this paragraph shall be disregarded for all purposes.

• (7) A company shall not be treated, for the purposes of section 24 of the 1985 Act, as having less than two members by reason only of the fact that its sole member is a controller’s default nominee registered in that capacity.

• (8) It is the duty of a controller whose default nominee is registered on an appropriate register as holder of a unit of an uncertificated security in that capacity (except by virtue of regulation 38 as a consequence of the provisions of regulation 21) to issue an instruction to register the person who was the account holder with respect to the entitlement to that unit at the date by reference to which the register was updated, as soon as practicable.

• (9) A controller may substitute another person as his or its default nominee and, if the controller does so, he or it shall notify the Operator and every company, in a security of whose the controller holds an entitlement, of the name and address of the person so substituted (unless the Operator has agreed to notify the company on behalf of the con-troller). However a company shall continue to regard the latest person notified to it as the controller’s default nominee as that nominee unless it has been given specific notice by the controller or (as the case may be) the Operator of the substitution and the name and address of the person substituted.

• (10) If a controller’s default nominee is registered on an appropriate register as the holder of a unit of an uncertificated security in that capacity at the time a company is notified under paragraph (9) of a substitution, the company shall as soon as reasonably practicable substitute the new default nominee for the old on that register.

• (11) A commercial controller shall be jointly and severally liable with a person appointed by the controller to act as the controller’s default nominee for any breach of trust or duty on the part of that person acting as such default nominee. A company and a company controller appointed by it shall also be jointly and severally liable with a person appointed by the controller to act as the controller’s default nominee with respect to the security of the company concerned for any breach of trust or duty on the part of that person whilst acting as such default nominee.

Special provisions applicable to controller holding for market nominee

62

• (1) This regulation shall apply during any period in which The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited, or (if that company is no longer the Operator) the Operator for the time being, is a Recognised Investment Exchange or Recognised Clearing House (within the meaning of the 1986 Act).

• (2) The Operator may perform the functions of a commercial controller with respect to any entitlements to units of a security held or to be held for a nominee appointed by the Operator in its capacity as such an Exchange or Clearing House, but in performing those functions the Operator shall only be subject to any requirements imposed on it by any rules made under regulation 112.

Arrangements for service to be made by the Operator

63

• (1) Subject to paragraph (2), the Operator shall at all times have a person in each jurisdiction appointed to accept service of any process in connection with the performance of its functions under these Regulations.

• (2) The Operator need not have such a person appointed for the jurisdiction in which it is incorporated or a jurisdiction in which it has an established place of business upon which service may be made under the law of that jurisdiction. The Operator may, for such a jurisdiction, appoint a particular place of business maintained by it at which it will accept service of such process as is referred to in paragraph (1).

• (3) The name and address of any person so appointed and the address of any such place of business shall be included in the list maintained by the Operator under regulation 56(1).

Service of process on participants and the Operator

64

• (1) Subject to the provisions of paragraph (5), this regulation has effect in relation to any notice, direction or other document required or authorised by or under these Regulations, or any process in connection with the performance of functions under these Regulations, to be served on any person other than the Secretary of State.

• (2) Any such document may be given to or served on the person in question:

• (a) by delivering it to him;

• (b) by leaving it at his proper address; or

• (c) by sending it by post to him at that address.

• (3) Any such document may:

• (a) in the case of a body corporate, be given to or served on the secretary or clerk of that body;

• (b) in the case of a partnership, be given to or served on any partner;

• (c) in the case of an unincorporated association other than a partnership, be given to or served on any member of the governing body of the association.

• (4) For the purposes of this regulation and section 7 of the Interpretation Act 1978 in its application to this regulation, the proper address of any person other than a con-troller, an approved person or the Operator is his last known address (whether of his residence or a place where he carries on business or is employed) and, in the case of a controller, an approved person or the Operator is the address applicable under the following provisions:

• (a) the address of any person whose name is listed (as a person on whom service may be effected in respect of the relevant jurisdiction) against the name of the controller or approved person concerned or (as the case may be) the Operator;

• (b) (in the case of the Operator) an address listed for the Operator (as an address on which service may be effected in respect of the relevant jurisdiction), in the appropriate list. For this purpose the—appropriate list is:

• (i) in the case of a company controller, that maintained by the company under regulation 9(6);

• (ii) in the case of an approved person, that maintained by the Operator under regulation 56(3);

• (iii) in the case of commercial controllers, that maintained by the Operator under regulation 56(1); or

• (iv) in the case of the Operator, that maintained by the Operator under regulation 56(1) and 63;

and a list is to be treated as being the appropriate list if it was available for inspection or (as the case may be) a copy was provided under those regulations on the date of service or on any day during the period of 5 working days prior to that date.

• (5) Where the Operator has appointed an agent or place of business under regulation 63 which is noted in the list maintained by the Operator under regulation 56(1), service of process in connection with the performance of its functions under these Regulations may only be effected by service under paragraph (4) (unless the copy of that list supplied to the person serving the process did not contain reference to the appointment of the agent or place of business).

• (6) If at any time the person whose name is so listed with respect to a commercial con-troller or approved person is dead or ceases to exist or has moved from the address listed or refuses to accept service on behalf of the commercial controller or approved person, service on the commercial controller or approved person may in addition be effected at a place of business of, or the registered office of, the Operator (subject to paragraph (5)) on which service may be effected under the law of the jurisdiction concerned or at the address of a person listed (in the list referred to in regulation 56(1)) for that jurisdiction as being appointed by the Operator to accept service on its behalf.

• (7) If at any time the person whose name is so listed with respect to a company controller is dead or ceases to exist or has moved from the address listed or refuses to accept service on behalf of the controller, service on the controller may in addition be effected at the registered office of the company.

Statements of account

65

• (1) Subject to paragraph (2), a controller shall, within 5 working days of any change in the number of entitlements held for one of his or its account holders or a person first becoming one of his or its account holders, send a statement of account to that person, unless the controller has reason to suspect that the address held by him or it for the person is not current or is, in his or its opinion, obviously not suitable for communications with the account holder. In the case of two or more persons acting jointly being together an account holder, the statement need only be sent to the first person listed in the controller’s record of account holders.

• (2) Paragraph (1) is subject to any different provision made in an agreement authorising a commercial controller to hold entitlements. It is also subject to any arrangements that might be made by a company and any primary and alternative company controllers of the company in respect of a statement to be sent in connection with the conversion of a security into uncertificated form.

• (3) A controller shall ensure that a statement of account is sent to each of his or its account holders not less often than every 12 months, unless the controller has reason to suspect that the address held by him or it for the person is not current or is, in his or its opinion, obviously not suitable for communications with the account holder. This paragraph applies notwithstanding any provision in any agreement to the contrary, including any agreement authorising a commercial controller to hold entitlements (entered into under regulation 13).

• (4) A statement of account under this regulation shall at least state:

• (a) the name and address of the controller;

• (b) whether the controller is acting as a commercial, alternative company or primary company controller in relation to the account;

• (c) the name of the account holder (in the case of persons acting jointly who are together an account holder, the name of each such person);

• (d) the address of the account holder as recorded in the controller’s record of account holders (in the case of persons acting jointly who are together an account holder, the address of the first person listed in the record);

• (e) the date as at which the statement is drawn up;

• (f) the name of the company which has issued the security concerned;

• (g) the identity of the security concerned;

• (h) the number of entitlements in that security held for the account holder on the date as at which the statement is drawn up; and

• (i) (where the statement is issued under paragraph (1) due to a change in the number of entitlements held for a person) the increase or decrease in the number of entitlements held.

Informal information as to account holders

66

If at any time the Operator and any commercial controller should afford the opportunity to companies to obtain, by means of the Operator’s part of the system, information of the following kinds, any communication to the company containing such information shall not be used for the purposes of updating in any manner the appropriate register for the security concerned:

• (a) information about some or all of the account holders of a particular controller or controllers only; or

• (b) information about the account holders of controllers as at a date prior to the last periodic update of the register.

PART VIII — FURTHER PROVISIONS WITH RESPECT TO THE PROCEDURES, RECORDS AND REGISTERS

THE PROCEDURES

No notice of trusts

67

• (1) No notice of any trusts or other interest in a unit of an uncertiticated security is to be receivable by the Operator. Nor is any such notice to be receivable by a controller, unless it is given by the account holder for whom the controller holds the entitlement to the unit concerned. Nothing in this paragraph shall be construed as preventing, in the case of a company incorporated in Scotland, the Operator giving notice of a trust to a company on behalf of a controller.

• (2) Section 360 of the 1985 Act shall (in the case of a company registered in England and Wales or Northern Ireland) have effect with respect to the appropriate register for an uncertificated security and the registrar of that register, whether or not the uncertificated security concerned is shares. However where the title to an uncertificated security is itself equitable title (for example in the case of debenture stock), section 360 as so applied shall have effect with respect to any interest in that equitable title.

Priority between communications

68

• (1) Subject to the next paragraph, where a controller receives two or more conflicting communications it is the duty of the controller to:

• (a) act on the communications in the order of their receipt; or

• (b) (in the event that they are received simultaneously or their time of receipt cannot be determined) to reject them.

Communications shall not be regarded as conflicting for this purpose solely because one communication amends or countermands the other.

• (2) Paragraph (1) shall apply unless it is not reasonably practicable, as a result of the manner in which communications received by the controller are processed, for the con-troller to comply with that paragraph.

Where paragraph (1) does not apply:

• (a) communications shall be regarded as having been properly acted upon by the controller notwithstanding that they have not been processed in order of their receipt or issue provided that they have been acted upon in the normal course of processing; and

• (b) the controller shall not be in breach of any duty of his or its under these Regulations by failing to act upon the communications in the order in which they have been received or made.

Powers of attorney (England and Wales and Northern Ireland)

69

• (1) This regulation, which has effect for the law of England and Wales and Northern Ireland, applies where the terms of an offer for all or any units of an uncertificated security provide that a person accepting the offer creates an irrevocable power of attorney (in the terms set out therein) in favour of the offeror or a person nominated by the offeror.

• (2) Where this regulation applies, an acceptance communicated by a commercial con-troller to which regulation 13(5) applies shall have the effect, without more, of creating an irrevocable power of attorney given by the person accepting the offer to which section 4 of the Powers of Attorney Act 1971[^f00014] applies in favour of the offeror or a person nominated by the offeror in the terms set out in the terms of the offer, unless the offeror or the person nominated by him had, at the time of its receipt, actual notice that the purported acceptance was unauthorised. This paragraph is without prejudice to the liability of a controller for the making of the communication without authority, but it applies whether or not the person accepting the offer is identified in the communication, provided that the identity of that person is, within such period as the recipient of the communication may reasonably require, notified to the recipient by the controller concerned.

• (3) A declaration in writing by the controller stating the terms of a power of attorney and that it has been granted by virtue of this regulation and stating the name and address of the grantor shall be prima facie evidence, and in Scotland sufficient evidence unless the contrary is shown, of the grant, and any requirement in any enactment or instrument to produce a copy of the power of attorney, or a copy thereof certified in a particular manner, may be satisfied by the production of the declaration or of a copy thereof certified in that manner.

RECORDS AND REGISTERS

Use of codes in records and messages &c

70

• (1) Where any information is to be included in any communication issued under or contemplated by these Regulations, that information may be given by means of a code agreed between the parties to the communication.

• (2) Any entry on any record or register to be made under these Regulations may, subject to the provisions of any other enactment to the contrary, be made by the use of a code, provided that a key to the codes used is maintained at the place where the register or record is kept and (where the register or record is open to the inspection of any person) is made available with the register or record for inspection. Where any person may require the provision of a copy of the register or record or part thereof, the key shall accompany any copy so provided.

Maintenance of records

71

Any record required to be maintained by these Regulations may be kept and maintained by the keeper of the record in any form and manner the keeper-thinks fit, provided that it is possible to reproduce a copy of the record in legible form. In particular the record may be updated by its replacement by a new version of the record superseding the existing version.

Rectification of errors in records and registers

72

A record of entitlements or an appropriate register for an uncertificated security may be amended by the person maintaining it if an entry on it has not been made, amended or deleted, or has been made, amended or deleted, as a consequence of a failure of the maintainer of the record to carry out its (the maintainer's) duties under these Regulations.

Rectification of record or register by the court

73

• (1) Section 359(1)(a) of the 1985 Act shall apply, with any necessary modifications, to a record of entitlements and (if it would not otherwise do so) to an appropriate register with respect to an uncertificated security as it applies to a company’s register of members maintained under section 352 of that Act, but only for the purpose of enabling the rectification:

• (a) of such an appropriate register where a company, without sufficient cause, has failed to act upon a proper instruction to register or has registered a person as a holder otherwise in accordance with these Regulations;

• (b) of such an appropriate register so as to cause the re-registration of an affected holder as the holder of a restricted unit within the meaning of regulation 53 where such holder has ceased to appear on the register with respect to such unit; or

• (c) of a record of entitlements, if an entry on the record has not been made, amended or deleted, or has been made, amended or deleted, as a consequence of a failure of the holder of the record to carry out its duties under these Regulations.

Section 359(2) to (4) shall apply for the purposes of section 359(1)(a) as applied by this regulation.

• (2) Section 359 shall not otherwise apply to a register of members which is the appropriate register with respect to an uncertificated security.

• (3) The court, in making an Order under section 359(2) of the 1985 Act as applied by this regulation, or under any other proceedings, requiring that a record of entitlements or appropriate register for an uncertificated security is to be rectified may make any necessary consequential Orders for the amendment of any records of entitlements or requiring an entitlement to be held, or not held, for a person by a controller.

• (4) Where the court has not made any consequential Orders under paragraph (3), it is the duty of the company to:

• (a) notify forthwith the Operator of the making of the Order together with the names of any commercial or alternative company controllers affected by the terms of the Order; and

• (b) where the court’s Order concerns any units of a security entitlements to which are held, or are pursuant to the Order to be held, by a primary company con-troller, forthwith:

• (i) amend its record of entitlements to the extent necessary to ensure that that record conforms with the rectified appropriate register; and

• (ii) notify the controller of the Order and its terms.

• (5) Where the Operator has been notified of the making,of an Order, under the last paragraph or otherwise, it is its duty:

• (a) as soon as practicable to amend its record of entitlements to the extent necessary to ensure that that record conforms with the rectified appropriate register; and

• (b) as soon as practicable to notify each commercial or alternative company con-troller affected by the Order of the making of the Order and of its terms.

• (6) It is the duty of each controller affected by the Order, having received such notification from the company or (as the case may be) from the Operator, forthwith so to amend his or its record of account holders as to ensure that the record reflects the rectified appropriate register.

PART IX — CREATION OF UNCERTIFICATED SECURITIES INTRODUCTORY

Securities: conversion into, and issue in, uncertificated form

74

• (1) A company may, in accordance with this Part of these Regulations, convert the units of any certificated security of the company in issue into an uncertificated security or may issue units of a security in uncertificated form.

• (2) A company may not, however, so convert or issue any shares of the company if:

• (a) they are not fully paid up as to the nominal value thereof and the whole of any premium thereon; or

• (b) they are numbered.

• (3) For the purposes of this Part of these Regulations, an “enabling resolution” is a special resolution passed by the company authorising the conversion of any securities of the company into uncertificated form and, where units of any security (existing or future) are at any time to be issued by the company, their issue in such form rather than certificated form, should the directors of the company think fit.

CHAPTER I — CONVERSION OF CERTIFICATED SECURITIES

Conversion of certificated securities into uncertificated form

75

• (1) Subject to the following provisions of this regulation, conversion of a certificated security into an uncertificated security shall be effected by two directors or a director and the secretary of the company signing a certificate of conversion in the form set out in Schedule 4 (with any necessary modifications).

• (2) Subject to paragraph (7), no such certificate shall be of any effect unless: