The Uncertificated Securities Regulations 2001

• (9) Where a dematerialisation notice is given in the circumstances specified in paragraph (2)(b), such title shall be retained, and (where appropriate) such membership shall be deemed to continue, until the time at which the Operator enters the name of the relevant system-member on an Operator register of securities in accordance with paragraph (7).

• (10) Within 2 months of receiving a dematerialisation notice, an Operator shall generate an Operator-instruction informing the participating issuer whether an entry has been made in an Operator register of securities in response to the dematerialisation notice.

• (11) Such sanctions as apply to a company and its officers in the event of a default in complying with subsections (1) and (2) of section 771 of the 2006 Act shall apply—

• (a) to a participating issuer and his officers in the event of a default in complying with paragraph (6); and

• (b) to an Operator and his officers in the event of a default in complying with paragraph (7) or (10).

New issues in uncertificated form

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• (1) For the purposes of an issue of units of a participating security, a participating issuer may require the Operator to enter the name of a person in an Operator register of securities as the holder of new units of that security in uncertificated form if, and only if, that person is a system-member; and provided that compliance with any such requirement shall be subject to the rules of the Operator.

• (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) A requirement made by a participating issuer under paragraph (1) may be made by means of an issuer-instruction and shall specify the names of the persons to be entered in the Operator register of securities as the holders of new uncertificated units of the security, and the number of such units to be issued to each of those persons.

• (4) An Operator who receives a requirement made by a participating issuer under paragraph (1) shall notify the participating issuer, by Operator-instruction or in writing, if he has not entered the name of any one or more of the persons in question in the Operator register of securities as the holder of new units of the security.

PART 4 — DEMATERIALISED INSTRUCTIONS ETC.

Properly authenticated dematerialised instructions, etc.

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• (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 relate 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 his 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 the properly authenticated dematerialised instruction 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 he has sent the properly authenticated dematerialised instruction.

• (4) An addressee who receives (whether directly, or by means of the facilities of a sponsoring system-participant acting on his 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 or at any time thereafter—

• (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, was 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 he received the properly authenticated dematerialised instruction or at any time thereafter—

• (a) he 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 he 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, his authority to send the properly authenticated dematerialised instruction on his behalf; or

• (b) he was a participating issuer, or a sponsoring system-participant receiving properly authenticated dematerialised instructions on behalf of a participating issuer, and—

• (i) he had actual notice from the Operator of any of the matters specified in subparagraph (a)(i) to (iii); or

• (ii) if the instruction was an Operator-instruction requiring the registration of a transfer of title, he had actual notice of any of the circumstances specified in regulation 28(3); or

• (c) he was an Operator and the instruction related to a transfer of units of a security which was in excess of any limit imposed by virtue of paragraph 15 of Schedule 1; or

• (d) he was an Operator and he had actual notice of any of the circumstances specified in regulation 27(2) in a case where the instruction was—

• (i) a system-member instruction requesting him to settle a transfer in accordance with his rules; or

• (ii) an issuer-instruction given in the circumstances specified in regulation 33(2)(b) requesting him to register a transfer of title.

• (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 he received the actual notice it was not practicable for him to halt the processing of the instruction.

• (7) Subject to paragraph (8), 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.

• (8) Subject to paragraph (9), 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 his having relied on the matter that he was permitted to accept.

• (9) The provisions of paragraph (8) do not affect—

• (a) any liability of the Operator to pay compensation under regulation 36; or

• (b) any liability of a participating issuer under regulation 46 arising by reason of a default in complying with, or contravention of, regulation 28(6).

• (10) 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 a properly authenticated dematerialised instruction indicates it is addressed in accordance with the rules and specifications referred to in paragraph 5(5) of Schedule 1.

• (11) Nothing in this regulation shall be taken, in respect of any authority, to modify or derogate from the protections to a donee or third person given by or under any enactment or to prohibit a donee or third person so protected from accepting any of the matters specified in paragraph (4).

• (12) Paragraphs (2) to (4), (5)(a), (6) to (9) and (11) of this regulation shall apply in relation to a written notification given under regulation 25(3) or 32(2)(c) as if—

• (a) each reference to a properly authenticated dematerialised instruction were to such a notification which has been authenticated by the Operator in accordance with rules made and practices instituted by the Operator in order to comply with paragraph 25(g) of Schedule 1;

• (b) each reference to information contained in the properly authenticated dematerialised instruction being correct (or incorrect) included, in the case of written notification given under subparagraph (c) of regulation 32(2), a reference to any statement of the sort referred to in that subparagraph being true (or untrue, as the case may be);

• (c) each reference to an addressee were a reference to the Operator; and

• (d) the reference in paragraph (6) to the processing of the instruction were to acting on the written notification.

Liability for forged dematerialised instructions, induced amendments to Operator registers of securities, and induced Operator-instructions

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• (1) For the purpose of this regulation—

• (a) a dematerialised instruction is a forged dematerialised instruction if—

• (i) it was not sent from the computers of a system-participant or the computers comprising an Operator-system; or

• (ii) it was not sent from the computers of the system-participant or the computers comprising an Operator-system (as the case may be) from which it is expressed to have been sent;

• (b) an act is a causative act if, not being a dematerialised instruction and not being an act which causes a dematerialised instruction to be sent from the computer of a system-participant, it unlawfully causes the Operator—

• (i) to make, delete or amend an entry on an Operator register of securities; or

• (ii) to send an Operator-instruction to a participating issuer;

• (c) an entry on, deletion from, or amendment to an Operator register of securities is an induced amendment if it is an entry on, deletion from, or amendment to an Operator register of securities which results from a causative act or a forged dematerialised instruction; and

• (d) an Operator-instruction is an induced Operator-instruction if it is an Operator-instruction to a participating issuer which results from a causative act or a forged dematerialised instruction.

• (2) If, as a result of a forged dematerialised instruction (not being one which results in an induced amendment to an Operator register of securities or an induced Operator-instruction), an induced amendment to an Operator register of securities, or an induced Operator-instruction, any one or more of the following events occurs—

• (a) the name of any person remains on, is entered on, or is removed or omitted from, a register of securities;

• (b) the number of units of a security in relation to which the name of any person is entered on a register of securities is increased, reduced, or remains unaltered;

• (c) the description of any units of a security in relation to which the name of any person is entered on a register of securities is changed or remains unaltered,

and that person suffers loss as a result, he may apply to the court for an order that the Operator compensate him for his loss.

• (3) It is immaterial for the purposes of subparagraphs (a) to (c) of paragraph (2) whether the event is permanent or temporary.

• (4) The court shall not make an order under paragraph (2)—

• (a) if the Operator identifies a person as being responsible (whether alone or with others) for the forged dematerialised instruction (not being one which results in an induced amendment to an Operator register of securities or an induced Operator-instruction) or the causative act or forged dematerialised instruction resulting in the induced amendment to the Operator register of securities or the induced Operator-instruction (as the case may be) notwithstanding that it is impossible (for whatever reason) for the applicant to obtain satisfactory compensation from that person; or

• (b) if the Operator shows that a participating issuer would be liable under regulation 46 to compensate the applicant for the loss in respect of which the application is made, by reason of the participating issuer’s default in complying with, or contravention of, regulation 28(6).

• (5) Subject to paragraphs (6) and (7), the court may award to an applicant compensation for—

• (a) each forged dematerialised instruction (not being one which results in an induced amendment to an Operator register of securities or an induced Operator-instruction);

• (b) each induced amendment to an Operator register of securities; and

• (c) each induced Operator-instruction,

resulting in an event mentioned in subparagraph (a), (b) or (c) of paragraph (2).

• (6) The court shall not under paragraph (5) award to an applicant—

• (a) more than £50,000 for each such forged dematerialised instruction, induced amendment to an Operator register of securities, or induced Operator-instruction;

• (b) compensation for both an induced amendment to an Operator register of securities and an induced Operator-instruction if that induced amendment and that induced Operator-instruction resulted from the same causative act or the same forged dematerialised instruction.

• (7) In respect of liability arising under this regulation the court shall—

• (a) in awarding compensation only order the Operator to pay such amount of compensation as it appears to it to be just and equitable in all the circumstances having regard to the loss sustained by the applicant as a result of the forged dematerialised instruction, induced amendment to the Operator register of securities, or induced Operator-instruction;

• (b) in ascertaining the loss, apply the same rules concerning the duty of a person to mitigate his loss as apply to damages recoverable under the common law of England and Wales, Northern Ireland, or Scotland, (as the case may be); and

• (c) where it finds that the loss was to any extent caused or contributed to by any act or omission of the applicant, reduce the amount of the award by such proportion as it thinks just and equitable having regard to that finding.

• (8) An application to the court for an order under paragraph (2) shall not prejudice any right of the Operator to recover from a third party any sum that he may be ordered to pay.

• (9) An event mentioned in subparagraph (a), (b) or (c) of paragraph (2) shall not give rise to any liability on the Operator other than such as is expressly provided for in this regulation, except such as may arise from fraud or other wilful default, or negligence, on the part of the Operator.

• (10) Subject to paragraph (9), this regulation does not affect—

• (a) any right which any person may have other than under this regulation (not being a right against the Operator); or

• (b) any liability which any person other than the Operator may incur other than under this regulation.

• (11) Where an application is made under paragraph (2), and the Operator receives from the applicant a request for information or documents relating to—

• (a) a forged dematerialised instruction;

• (b) an induced amendment to an Operator register of securities; or

• (c) an induced Operator-instruction,

in respect of which the application is made, the Operator shall, in so far as he is able, and in so far as the request is reasonable, within one month give the applicant the information and documents.

• (12) The applicant shall, in so far as he is able, within one month give the Operator such information or documents as the Operator reasonably requests in connection with an application under paragraph (2) with respect to—

• (a) steps taken by the applicant to prevent the giving of any forged dematerialised instruction (whether of the kind referred to in paragraph (2) or of any other kind); and

• (b) steps taken by the applicant to mitigate the loss suffered by him,

provided that the applicant need not give information or documents pursuant to this paragraph until the Operator has complied with any request made by virtue of paragraph (11).

• (13) Neither the Operator nor the applicant shall be required to disclose any information by virtue of, respectively, paragraph (11) or (12) which would be privileged in the course of civil proceedings, or, in Scotland, which they would be entitled to refuse to disclose—

• (a) on grounds of confidentiality as between client and professional legal adviser in proceedings in the Court of Session; or

• (b) on grounds of confidentiality of communications made in connection with, or in contemplation of, such proceedings and for the purposes of those proceedings.

• (14) The jurisdiction conferred by this regulation shall be exercisable, in the case of a participating security constituted under the law of England and Wales, or Northern Ireland, by the High Court; and in the case of a participating security constituted under the law of Scotland by the Court of Session.

PART 5 — MISCELLANEOUS AND SUPPLEMENTAL

MISCELLANEOUS

Construction of references to transfers etc.

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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 issuer register of securities in accordance with the Operator-instruction.

Certain formalities and requirements not to apply

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• (1) Any requirements in an enactment or rule of law which apply in respect of the transfer of securities otherwise than by means of a relevant system shall not prevent—

• (a) an Operator from registering a transfer of title to uncertificated units of a security upon settlement of a transfer of such units in accordance with his rules; or

• (b) an Operator-instruction from requiring a participating issuer to register a transfer of title to uncertificated units of a security.

• (2) Subject to regulation 32(7), notwithstanding any enactment, instrument or rule of law, a participating issuer shall not issue a certificate in relation to any uncertificated units of a participating security.

• (3) 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—

• (a) section 768 of the 2006 Act shall not apply to any document issued with respect to uncertificated shares; and

• (b) regulation 9(3) of the 2004 Regulations and regulation 6(3) of the 1974 Regulations shall not apply to any document issued with respect to uncertificated units of a public sector security.

• (4) Any requirement in or under any enactment to endorse any statement or information on a certificate evidencing title to a unit of a security—

• (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 for the relevant participating issuer to provide the holder of the units with the statement or information on request by him.

• (5) Sections 53(1)(c) and 136 of the Law of Property Act 1925 (which impose requirements for certain dispositions and assignments to be in writing) shall not apply (if they would otherwise do so) to—

• (a) any transfer of title to uncertificated units of a security by means of a relevant system; and

• (b) any disposition or assignment of an interest in uncertificated units of a security title to which is held by a relevant nominee.

• (6) In paragraph (5) “relevant nominee” means a subsidiary undertaking of an Operator designated by him as a relevant nominee in accordance with such rules and practices as are mentioned in paragraph 25(f) of Schedule 1.

• (7) Section 772 of the 2006 Act shall not apply in relation to the transfer of uncertificated units of a security by means of a relevant system.

Fees charged by Operators

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• (1) Subject to paragraph (2), nothing in these Regulations prevents an Operator from charging a fee for carrying out any function under Part 3 of these Regulations.

• (2) An Operator may not charge a fee to a participating issuer for maintaining or keeping and entering up an Operator register of securities.

Trusts, trustees and personal representatives etc.

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• (1) Unless expressly prohibited from transferring units of a security by means of any computer-based system, 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 he has the power to acquire in connection with the trust or estate, he has paid for the units under arrangements which provide for them to be transferred to him 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 a security which he has power to dispose of in connection with the trust or estate, he has transferred the units to a system-member under arrangements which provide that the price is not to be paid to him until after the transfer is made; or

• (c) for the purpose 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, he has become a system-member.

• (2) Notwithstanding sections 750 and 751 of the 2006 Act, 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 the fact that he has assented to an amendment of the trust deed only for the purposes of—

• (a) allowing the holding of 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 he has given or caused to be given notice of the amendment in accordance with the trust deed not less than 30 days prior to its becoming effective to all persons registered as holding the debentures on a date not more than 21 days before the dispatch of the notice.

• (3) Without prejudice to regulation 23(3) or section 126 of the 2006 Act, 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 he has actual or constructive notice of the said trust or interest.

• (4) Paragraph (3) shall not prevent, in the case of a participating issuer constituted under the law of Scotland, an Operator giving notice of a trust to the participating issuer on behalf of a system-member.

Notices of meetings etc.

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• (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.

• (3) For the purposes of—

• (a) serving notices of meetings, whether under section 310(1) of the 2006 Act, any other enactment, a provision in the articles of association or any other instrument; or

• (b) sending copies of the documents required to be sent to any person by section 423(1) of the 2006 Act,

a participating issuer may determine that persons entitled to receive such notices, or copies of such documents (as the case may be), are those persons entered on the relevant register of securities at the close of business on a day determined by him.

• (4) The day determined by a participating issuer under paragraph (3) may not be more than 21 days before the day that the notices of the meeting, or the copies of the documents as the case may be, are sent.

• (5) This regulation is without prejudice to the protection afforded—

• (a) by paragraph 5(3) of Schedule 4, to a participating issuer which is a company; and

• (b) by paragraph 13(4) or 15(3) of Schedule 4, to a participating issuer.

• (6) In calculating the period mentioned in paragraph (1) above no account shall be taken of any part of a day that is not a working day.

Notices to minority shareholders

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• (1) Paragraphs (2) to (4) shall apply in relation to any uncertificated units of a security (other than a wholly dematerialised security) to which a notice given under section 979 of the 2006 Act relates, in place of the provisions of section 981(7) of that Act.

• (2) Immediately on receipt of a copy sent under section 981(6)(a) of the 2006 Act of a notice given under section 979 relating to uncertificated units of a participating security (whether or not it also relates to certificated units of the security), a company which is a participating issuer shall—

• (a) by issuer-instruction—

• (i) inform the Operator that the copy notice has been received, and

• (ii) identify the holding of uncertificated units of the participating security to which the notice relates; and

• (b) enter the name of the relevant system-member on an issuer register of securities as the holder of those uncertificated units.

• (3) On receipt of an issuer-instruction under paragraph (2)(a), the Operator shall delete any entry in an Operator register of securities which shows the relevant system-member as the holder of the uncertificated units of the participating security to which the notice relates.

• (4) On registration on an issuer register of securities (in accordance with paragraph (2)(b)) of the relevant system-member as the holder of the uncertificated units of the participating security to which the notice relates, the participating issuer—

• (a) shall be under the same obligation to enter the offeror on that register as the holder of those units, in place of the relevant system-member, as it would be if it had received an Operator-instruction under regulation 28(2) requiring it to register a transfer of title to those units in that manner; and regulation 28(9) shall have effect accordingly; and

• (b) where the terms of issue of the security in question provide for a certificate to be issued, shall issue to the offeror a certificate in respect of those units.

• (5) Subsection (1) of section 776 of the 2006 Act shall apply in relation to the issue of a certificate by a participating issuer pursuant to paragraph (4)(b) as it applies in relation to the completion and having ready for delivery by a company of share certificates, debentures or certificates of debenture stock; and in that subsection as it so applies the reference to the date on which a transfer is lodged with the company shall be a reference to the date on which the participating issuer receives the copy notice sent under section 981(6)(a) of the 2006 Act.

• (6) Such sanctions as apply to a company and its officers in the event of a default in complying with subsection (1) of section 776 of the 2006 Act shall apply to a participating issuer and his officers in the event of a default in complying with paragraph (4)(b) in accordance with the requirements laid down in paragraph (5).

• (7) Paragraphs (8) to (11) shall apply in relation to any units of a wholly dematerialised security to which a notice given under section 979 of the 2006 Act relates, in place of the provisions of section 981(7) of that Act.

• (8) Immediately on receipt of a copy sent under section 981(6)(a) of the 2006 Act of a notice given under section 979 relating to units of a wholly dematerialised security, a company which is a participating issuer shall—

• (a) by issuer-instruction—

• (i) inform the Operator that the copy notice has been received; and

• (ii) identify the holding of units of the wholly dematerialised security to which the notice relates; and

• (b) by a further issuer-instruction, inform the Operator of the name of the transferee.

• (9) On receipt of an issuer-instruction under paragraph (8)(a), the Operator shall delete any entry in an Operator register of securities which shows the relevant system-member as the holder of the units to which the notice relates.

• (10) On receipt of an issuer-instruction under paragraph (8)(b), the Operator shall enter the transferee on the relevant Operator register of securities as the holder of the units to which the notice relates, in place of the relevant system-member.

• (11) Where an Operator deletes an entry in an Operator register of securities pursuant to paragraph (9)—

• (a) the units of the wholly dematerialised security to which the notice relates shall notwithstanding that deletion, continue to be regarded as uncertificated units for the purposes of these Regulations until the Operator enters the transferee on the relevant Operator register of securities as the holder of those units;

• (b) subject to—

• (i) subparagraph (c) or (d), as the case may be; and

• (ii) any enactment or rule of law,

the relevant system-member shall, notwithstanding that deletion, retain title to the units of the wholly dematerialised security to which the notice relates until the transferee is entered on the relevant Operator register of securities pursuant to paragraph (10);

• (c) in the case of a security constituted under the law of England and Wales or Northern Ireland, the transferee shall acquire an equitable interest in the units of the wholly dematerialised security to which the notice relates;

• (d) in the case of a security constituted under the law of Scotland, the relevant system-member shall hold the units of the wholly dematerialised security to which the notice relates on trust for the benefit of the transferee.

• (12) Such sanctions as apply to a company and its officers in the event of a default in complying with subsections (1) and (2) of section 771 of the 2006 Act shall apply—

• (a) to a participating issuer and his officers in the event of a default in complying with paragraph (2)(b) or (8); and

• (b) to an Operator and his officers in the event of a default in complying with paragraph (3), (9) or (10).

• (13) For the purposes of this regulation—

• (a) “offeror” has the meaning in section 991(1) of the 2006 Act;

• (b) “relevant system-member” means the system-member identified in the copy notice sent under section 981(6)(a) of the 2006 Act as the holder of the uncertificated units, or as the case may be the units of the wholly dematerialised security, to which the notice relates; and

• (c) “transferee” means the offeror or, if the offeror is not a system-member, the system-member in whose name the units of the wholly dematerialised security to which the notice given under section 979 of the 2006 Act relates are to be registered on the Operator register of securities.

• (14) The reference in section 987(8) of the 2006 Act to section 981(7) shall be taken to include a reference to the provisions of paragraphs (4), (8) and (9).

Irrevocable powers of attorney

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• (1) This regulation applies where the terms of an offer for all or any uncertificated units of a participating security provide that a person accepting the offer creates an irrevocable power of attorney in favour of the offeror, or a person nominated by the offeror, in the terms set out in the offer.

• (2) An acceptance communicated by properly authenticated dematerialised instruction in respect of uncertificated units of a security shall constitute a grant of an irrevocable power of attorney by the system-member accepting the offer in favour of the offeror, or person nominated by the offeror, in the terms set out in the offer.

• (3) Where the contract constituted by such offer and acceptance as are referred to in paragraphs (1) and (2) respectively is governed by the law of England and Wales, section 4 of the Powers of Attorney Act 1971¹¹ shall apply to a power of attorney constituted in accordance with this regulation.

• (4) A declaration in writing by the offeror 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, rule of law, or instrument to produce a copy of the power of attorney, or such a copy certified in a particular manner, shall be satisfied by the production of the declaration or a copy of the declaration certified in that manner.

• (5) In the application of this regulation to an offer, acceptance or contract governed by the law of Scotland, any reference to an irrevocable power of attorney shall mean and include reference to an irrevocable mandate, however expressed.

Actual notice

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For the purpose of determining under these Regulations whether a person has actual notice of a fact, matter or thing that person shall not under any circumstances be taken to be concerned to establish whether or not it exists or has occurred.

Participating securities issued in uncertificated form

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Nothing in these Regulations shall require—

• (a) a participating issuer or its officers to maintain a register which records how many units of a wholly dematerialised security are held in certificated form; or

• (b) an Operator or participating issuer, or their officers, to take any action to change a unit of a wholly dematerialised security from uncertificated form to certificated form or vice versa.

DEFAULTS AND CONTRAVENTIONS

Breaches of statutory duty

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• (1) A default in complying with, or a contravention of, regulation 16(8), 19(2), 25(1), 26, 28(5) or (6), 32(5), 33(5), or 42(2) or (8) shall be actionable at the suit of a person who suffers loss as a result of the default or contravention, or who is otherwise adversely affected by it, subject to the defences and other incidents applying to actions for breach of statutory duty.

• (2) Paragraph (1) shall not affect the liability which any person may incur, nor affect any right which any person may have, apart from paragraph (1).

Liability of officers for contraventions

47

• (1) In regulation 16(7), 20(7), 21(5), 22(5), 28(9), 32(9) or (10), 33(11) or 42(6) or (12) an officer of a participating issuer shall be in default in complying with, or in contravention of, the provision mentioned in that regulation if, and only if, he knowingly and wilfully authorised or permitted the default or contravention.

• (2) In regulation 20(7), 21(4), 22(4), 27(9), 32(9), 33(11) or 42(12) an officer of an Operator shall be in default in complying with, or in contravention of, the provision mentioned in that regulation if, and only if, he knowingly and wilfully authorised or permitted the default or contravention.

Exemption from liability

48

Regulations 21(5), 28(9), 32(9) and (10), and 33(11) shall not apply to any of the following or its officers—

• (a) the Crown;

• (b) any person acting on behalf of the Crown;

• (c) the Bank of England;

• (d) the Registrar of Government Stock;

• (e) any previous Registrar of Government Stock; or

• (f) in respect of a security which immediately before it became a participating security was transferable by exempt transfer within the meaning of the Stock Transfer Act 1982, a participating issuer.

NORTHERN IRELAND

Application to Northern Ireland

49

• (1) In their application to Northern Ireland, these Regulations shall have effect with the following modifications.

• (2) In regulation 38(5)—

• (a) for the reference to section 53(1)(c) of the Law of Property Act 1925 there shall be substituted a reference to section 6 of the Statute of Frauds (Ireland) 1695¹²; and

• (b) for the reference to section 136 of the Law of Property Act 1925 there shall be substituted a reference to section 87 of the Judicature (Northern Ireland) Act 1978¹³.

• (3) In regulation 43(3) for the reference to section 4 of the Powers of Attorney Act 1971 there shall be substituted a reference to section 3 of the Powers of Attorney Act (Northern Ireland) 1971¹⁴.

• (4) In Schedule 4—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) in paragraph 6(1), for the words from “in the case of a company registered in England and Wales” to the end there shall be substituted “elsewhere than in Northern Ireland”;

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (e) in paragraph 16(2), for subparagraphs (a) and (b) there shall be substituted “in Northern Ireland”; and

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TRANSITORY PROVISIONS, AMENDMENTS AND REVOCATIONS

Transitory provisions

50

Schedule 6 (transitory provisions) shall have effect.

Minor and consequential amendments

51

Schedule 7 (minor and consequential amendments) shall have effect.

Revocations

52

• (1) The following provisions of the 1965 Regulations are hereby revoked, namely—

• regulation 4(3) and (4);

• regulations 4A and 4B;

• regulation 6(5);

• regulation 17(7);

• regulation 18(5);

• regulation 19(2);

• regulation 20(2); and

• Schedule 1.

• (2) The following provisions of the 1974 Regulations are hereby revoked, namely—

• regulation 6(6);

• regulation 6A;

• regulation 7(1)(b), (4) and (5);

• regulation 8(2) and (3);

• regulation 9(4);

• regulation 10(3);

• regulation 16(4);

• regulation 21(3); and

• Schedule 2.

• (3) The 1995 Regulations are hereby revoked.

• (4) The following provisions of the Open-Ended Investment Companies Regulations 2001¹⁵ are hereby revoked, namely—

• regulation 47(1);

• in Schedule 3— paragraph 2(2), paragraph 5(1)(c) and the word “and” immediately before it, and paragraph 6(3)(d) and the word “and” immediately before it;

• paragraph 3 of Schedule 4; and

• paragraph 12 of Schedule 7.

SCHEDULE 1 — Requirements for operation of a relevant system

Arrangements and resources

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial resources

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Promotion and maintenance of standards

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operation of the relevant system

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

System security

5

• (1) A relevant system must satisfy the requirements of sub-paragraphs (3) to (6).

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) Each dematerialised instruction must be authenticated—

• (a) in accordance with the specifications of the Operator, and those specifications shall provide that each dematerialised instruction is identifiable as being from the computers of the Operator or of a particular system-participant; or

• (b) if it is sent to the Operator by, or by the Operator to, a depositary, a clearing house or an exchange, in accordance with specifications of that depositary, clearing house or exchange to which the Operator has agreed and which provide that each dematerialised instruction—

• (i) is identifiable as being from the computers of the Operator or of the depositary, clearing house or exchange which sent it; ...

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Each dematerialised instruction must, in accordance with any relevant rules of the Operator and with the specifications of the Operator or the specifications referred to in subparagraph (3)(b) (as the case may be), express by whom it has been sent and, where relevant, on whose behalf it has been sent.

• (5) Each dematerialised instruction must, in accordance with any relevant rules of the Operator and with the specifications of the Operator or the specifications referred to in subparagraph (3)(b) (as the case may be), indicate—

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

• (b) 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

• (c) where it is sent to the Operator in order for him 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.

• (6) The relevant system must minimise the possibility for a system-participant to send a dematerialised instruction on behalf of a person from whom he has no authority.

• (7) For the purposes of this paragraph—

• “clearing house” means a body or association—which is a recognised clearing house within section 285(1)(b) of the 2000 Act;which is authorised under that Act to provide clearing services in the United Kingdom; ...which is ... a third country central counterparty within the meaning of section 285(1) of the 2000 Act; orwhich provides services outside the United Kingdom which are similar in nature to those provided by any such body or association, and which is regulated or supervised in the provision of those services by a regulatory body or agency of government;

• “depositary” means a CSD or third-country CSD within the meaning of the CSD regulation as amended from time to time or a body or association carrying on business outside the United Kingdom with whom an Operator has made arrangements—to enable system-members to hold (whether directly or indirectly) and transfer title to securities (other than participating securities) by means of facilities provided by that body or association; orto enable that body or association to permit persons to whom it provides services in the course of its business to hold (whether directly or indirectly) and transfer title to participating securities by means of the Operator’s relevant system; and

• “exchange” means a body or association—which is a recognised investment exchange within section 285(1)(a) of the 2000 Act;which is authorised under that Act to provide a facility for the matching and execution of transactions in securities in the United Kingdom; orwhich provides services outside the United Kingdom which are similar in nature to those provided by any such body or association, and which is regulated or supervised in the provision of those services by a regulatory body or agency of government.

System capabilities

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

A relevant system must enable an Operator to comply with his obligations to keep all necessary Operator registers of securities in accordance with these Regulations.

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

A relevant system must be able to permit each participating issuer to inspect the entries from time to time appearing in an Operator register of securities (other than an Operator register of eligible debt securities) relating to any participating security issued by him.

13

A relevant system must be able to establish, where there is a transfer of uncertificated units of a security to a system-member for value, that a settlement bank has agreed to make payment in respect of the transfer, whether alone or taken together with another transfer for value.

14

A relevant system must ensure that the Operator-system is able to generate Operator-instructions—

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

• (b) informing participating issuers in a way which enables them to amend the appropriate records of securities kept by them; and

• (c) informing settlement banks of their payment obligations.

15

A relevant system must—

• (a) enable a system-member—

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

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

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

16

For the purposes of paragraph 15(a)(ii), once authority is granted pursuant to a system charge (within the meaning of regulation 3 of the Financial Markets and Insolvency Regulations 1996¹⁶) a limit of such authority shall not be imposed or changed without the consent of the donee of that authority.

17

Nothing in paragraph 15 or 16 shall be taken, in respect of an authority, to modify or derogate from the protections given by or under any enactment to a donee of the authority or a third person.

18

A relevant system must enable system-members—

• (a) to change the form in which they 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.

19

Paragraph 18 shall not apply to any wholly dematerialised security.

Operating procedures

20

A relevant system must comprise procedures which provide that it responds only to properly authenticated dematerialised instructions which are attributable to a system-user or an Operator.

21

• (1) Subject to subparagraphs (2) to (5), a relevant system must comprise procedures which provide that an Operator only registers a transfer of title to uncertificated units of a security or generates an Operator-instruction requiring a participating issuer to register such a transfer, and only generates an Operator-instruction informing a settlement bank of its payment obligations in respect of such a transfer, if—

• (a) it has—

• (i) received a system-member instruction which is attributable to the transferor; or

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

• (b) it has—

• (i) established that the transferor has title to 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 registered in accordance with regulation 30(2);

• (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 15(a)(ii) the transferor has set on an authority given by him to a sponsoring system-participant.

• (2) Subparagraph (1)(a) shall not prevent the registration by an Operator of a transfer of title to uncertificated units of a security, or the generation of an Operator-instruction, in accordance with procedures agreed between the Operator and the transferor to enable the transfer by means of a relevant system of uncertificated units of a security provided that such transfer is for the purpose of, or relates to, facilitating the provision of financial credit or financial liquidity to the transferor by a settlement bank, the Bank of England, the European Central Bank, any other central bank, or any other body having functions as a monetary authority.

• (3) A relevant system must comprise procedures which provide that—

• (a) the Operator may amend an Operator register of securities; and

• (b) 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 made and practices instituted by the Operator in order to comply with this Schedule.

• (4) A relevant system must comprise procedures which provide that—

• (a) the Operator may amend an Operator register of securities; and

• (b) an Operator-instruction requiring a participating issuer to register a transfer of units of a wholly dematerialised security, or informing a settlement bank of its payment obligations in respect of such a transfer, may be generated,

if necessary to effect a transfer of such units, on the termination of participation in the relevant system by the system-member by whom those units are held and if in accordance with the rules made and practices instituted by the Operator in order to comply with this Schedule, to a person nominated under the Operator’s rules.

• (5) Subparagraph (1)(a) shall not prevent the registration by an Operator of a transfer of title to uncertificated units of a security, or the generation of an Operator-instruction, in order to give effect to the procedures referred to in subparagraph (3) or (4).

22

• (1) Subject to subparagraph (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, is generated only if it has—

• (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 in the United Kingdom 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 made and practices instituted by an Operator in order to comply with this Schedule.

23

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rules and practices

25

An Operator’s rules and practices—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) must make provision as to the manner in which a system-member or the relevant participating issuer may change the form in which that system-member holds units of a participating security (other than a wholly dematerialised security);

• (c) 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 the uncertificated units of the relevant security held by system-members;

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (e) must make provision—

• (i) as to which of the Operator’s records are to constitute an Operator register of securities in relation to a participating security, or a participating security of a particular kind; and

• (ii) as to the times at which, and the manner in which, a participating issuer may inspect an Operator register of securities (other than an Operator register of eligible debt securities) in accordance with paragraph 12;

• (f) 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; and

• (g) must make provision for the authentication by the Operator of any written notification given under regulation 25(3) or 32(2)(c).

26

An Operator’s rules and practices must require—

• (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 him to be sent;

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

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

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

27

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE2 — PREVENTION OF EXCESSIVE REGULATORY PROVISION

Examination of rules and practices

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Modification of paragraph 1 where delegation order is made

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reports by the Office of Fair Trading

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investigations by the Office of Fair Trading

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemptions from the Fair Trading Act 1973

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemptions from the Competition Act 1998

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary provisions

7

• (1) Any direction given under this Schedule shall, on the application of the person by whom it was given, be enforceable by injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

• (2) The fact that any rules made by an Operator have been altered by or pursuant to a direction given by the Treasury under this Schedule shall not preclude their subsequent alteration or revocation by the Operator.

• (3) In determining under this Schedule whether any guidance has, or is likely to have, any particular effect the Treasury and the Director may assume that the persons to whom it is addressed will act in conformity with it.

SCHEDULE 3 — Procedure for giving directions

1

Before—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) giving a direction under regulation 8,

the Bank of England must give written notice of its intention to do so to the Operator.

2

A notice under paragraph 1 shall—

• (a) state why the Bank of England intends to ... give the direction; and

• (b) draw attention to the right to make representations conferred by paragraph 3.

3

Before the end of the period for making representations, the Operator may make representations to the Bank of England.

4

The period for making representations is such period as is specified in the notice (which may, in any particular case, be extended by the Bank of England).

5

In deciding whether to ... give the direction ... the Bank of England must have regard to any representations made in accordance with paragraph 3.

6

• (1) When the Bank of England has decided whether to—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) give the direction;

it must give the Operator written notice of its decision and the reasons for its decision.

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 4 — KEEPING OF REGISTERS AND RECORDS OF PARTICIPATING SECURITIES

Interpretation

1

In this Schedule—

• “uncertificated shares” means shares title to which may be transferred by means of a relevant system; and “certificated shares” means shares which are not uncertificated shares; and

• “uncertificated stock” means stock title to which may be transferred by means of a relevant system; and “certificated stock” means stock which is not uncertificated stock.

Registers of Members

2

• (1) Every participating issuer which is a company shall enter in its issuer register of members—

• (a) the names and addresses of the members;

• (b) the date on which each person was registered as a member; and

• (c) the date at which any person ceased to be a member.

• (2) With the names and addresses of the members there shall be entered a statement—

• (a) of the certificated shares held by each member, distinguishing each share by its number (so long as the share has a number) and, where the company has more than one class of issued shares, by its class; and

• (b) of the amount paid or agreed to be considered as paid on the certificated shares of each member.

• (3) Where the company has converted any of its shares into stock and given notice of the conversion to the registrar of companies, the issuer register of members shall show the amount and class of the certificated stock held by each member, instead of the amount of shares and the particulars relating to shares specified in subparagraph (2).

• (4) Subject to subparagraph (5), section 113 of the 2006 Act shall not apply to a company which is a participating issuer, other than as respects any overseas branch register.

• (5) Section 113(7) and (8) of the 2006 Act shall apply to a participating issuer which is a company which makes default in complying with this paragraph and every officer of it who is in default as if such a default were a default in complying with section 113 of that Act.

• (6) An entry relating to a former member of the company may be removed from the issuer register of members after the expiration of 10 years beginning with the day on which he ceased to be a member.

• (7) For the purposes of this paragraph references to an issuer register of members shall not be taken to include an overseas branch register.

3

Section 123 of the 2006 Act shall apply to a participating issuer which is a private company limited by shares as if references therein to the company’s register of members were references to its issuer register of members.

4

• (1) In relation to every participating issuer which is a company, an Operator of a relevant system shall, in respect of any class of shares which is a participating security for the purposes of that system, enter on an Operator register of members—

• (a) the names and addresses of the members who hold uncertificated shares in the company;

• (b) with those names and addresses a statement of the uncertificated shares held by each member and, where the company has more than one class of issued uncertificated shares, distinguishing each share by its class; and

• (c) where the company has converted any of its shares into stock and given notice of the conversion to the registrar of companies, the Operator register of members shall show the amount and class of uncertificated stock held by each member, instead of the amount of shares and the particulars relating to shares specified in subparagraph (b).

• (2) An entry relating to a member of a company who has ceased to hold any uncertificated shares in the company may be removed from the Operator register of members after the expiration of 10 years beginning with the day on which he ceased to hold any such shares.

• (3) For the purposes of this paragraph references to an Operator register of members shall not be taken to include an overseas branch register.

• (4) Members of a company who hold shares in uncertificated form may not be entered as holders of those shares on an overseas branch register.

Records of uncertificated shares

5

• (1) Every participating issuer which is a company shall enter in its record of uncertificated shares—

• (a) the same particulars, so far as practicable, as are required by paragraph 4(1) to be entered in the Operator register of members; and

• (b) a statement of the amount paid or agreed to be considered as paid on the uncertificated shares of each member.

• (2) A company to which this paragraph applies shall, unless it is impracticable to do so by virtue of circumstances beyond its control, ensure that the record of uncertificated shares is regularly reconciled with the Operator register of members.

• (3) Provided that it has complied with subparagraph (2), a company shall not be liable in respect of any act or thing done or omitted to be done by or on behalf of the company in reliance upon the assumption that the particulars entered in any record of uncertificated shares which the company is required to keep by these Regulations accord with the particulars entered in its Operator register of members.

• (4) Section 113(7) and (8) of the 2006 Act shall apply to a participating issuer which is a company which makes default in complying with this paragraph and every officer of it who is in default as if such a default were a default in complying with section 113 of that Act.

Location of issuer register of members and records of uncertificated shares, and ancillary matters

6

• (1) Subject to subparagraph (2), a company’s issuer register of members and its record of uncertificated shares shall be kept available for inspection at its registered office or at a place specified in regulations made under section 1136 of the 2006 Act

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

but the issuer register of members must not be kept available for inspection, in the case of a company registered in England and Wales, at any place elsewhere than in England and Wales or, in the case of a company registered in Scotland, at any place elsewhere than in Scotland.

• (2) A company’s issuer register of members and its record of uncertificated shares shall at all times be kept available for inspection at the same place.

• (3) Subject as follows, every participating issuer which is a company shall send notice ... to the registrar of companies of the place where its issuer register of members and its record of uncertificated shares are kept available for inspection, and of any change in that place, provided that any notice sent by such a company in accordance with section 114(2) of the 2006 Act, and which has effect on the coming into force of these Regulations, shall be treated as being a notice sent in compliance with this subparagraph.

• (4) The notice need not be sent if the issuer register of members and the record of uncertificated shares have at all times since they came into existence been kept available for inspection at the company’s registered office.

• (5) Subject to subparagraph (6), section 114 of the 2006 Act shall not apply to a company which is a participating issuer.

• (6) Section 114 (6) of the 2006 Act shall apply to a participating issuer which is a company which makes default in complying with subparagraph (2) at any time, or makes default for 14 days in complying with subparagraph (3), and every officer of it who is in default as if such a default were a default in complying with section 114(2) of that Act.

7

• (1) Every participating issuer which is a company having more than 50 members shall, unless the particulars required by paragraph 2(1) to be entered in the issuer register of members are kept in such a form as to constitute in themselves an index, keep an index of the names of the members of the company and shall, within 14 days after the date on which any alteration is made in the issuer register of members or the Operator register of members, make any necessary alteration in the index.

• (2) The index shall in respect of each member contain a sufficient indication to enable the account of that member in the issuer register of members and, in the case of a member who holds uncertificated shares in the company, in the record of uncertificated shares, to be readily found.

• (3) The index shall be at all times kept available for inspection at the same place as the issuer register of members and the record of uncertificated shares.

• (4) Subject to subparagraph (5), section 115 of the 2006 Act shall not apply to a company which is a participating issuer.

• (5) Section 115(5) and (6) of the 1985 Act shall apply to a participating issuer which is a company which makes default in complying with this paragraph and every officer of it who is in default as if such a default were a default in complying with section 115 of that Act.

8

Section 122 of the 2006 Act shall apply to a company which is a participating issuer as if references in that section to the company’s register of members were references instead to its issuer register of members.

9

Sections 115 to 118 of the 2006 Act shall apply to a company which is a participating issuer as if—

• (a) references in those provisions to the company’s register of members were references to its issuer register of members and its record of uncertificated shares; and

• (b) references in section 116 to the company’s index of members’ names were references to the index required to be kept by paragraph 7,

and references to the 2006 Act in the Companies (Fees for Inspection and Copying of Company Records) Regulations 2007 and the Companies (Fees for Inspection and Copying of Company Records) Regulations 2008 shall be construed accordingly.

10

Where under paragraph 6(1), a company’s issuer register of members and record of uncertificated shares is kept available for inspection at the office of some person other than the company, and by reason of any default of his the company fails to comply with—

• paragraph 6(2) (record of uncertificated shares to be kept available for inspection with issuer register of members);

• paragraph 6(3) (notice to registrar);

• paragraph 7(3) (index to be kept available for inspection with issuer register of members and record of uncertificated shares); or

• section 116 of the 2006 Act (rights to inspect and require copies),

or with any requirement of the 2006 Act as to the production of the register of members or any part thereof, that other person is liable to the same penalties as if he were an officer of the company who was in default, and the power of the court under section 118(3) of the 2006 Act extends to the making of orders against that other and his officers and servants.

11

Where, under section 125 of the 2006 Act, the court orders rectification of the register of members of a company which is a participating issuer, it shall not order the payment of any damages under subsection (2) of that section to the extent that such rectification relates to the company’s Operator register of members and does not arise from an act or omission of the Operator on the instructions of that company or from fraud or other wilful default, or negligence, on the part of that company.

Registers of general public sector securities

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• (1) Where an Operator of a relevant system is required to maintain an Operator register of general public sector securities, that register shall comprise the following particulars which the Operator shall enter on it, namely—

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

• (b) how many units of that security each such person holds in that form.

• (2) The following provisions of the 2004 Regulations shall not apply in respect of units of general UK Government securities held in uncertificated form—

• regulations 7 to 9;

• regulations 12 to 14;

• regulations 16 to 24;

• regulation 28; and

• regulations 30 to 31.

• (3) The following provisions of the 1974 Regulations shall not apply in respect of units of general local authority securities held in uncertificated form—

• regulations 5 and 6;

• regulations 8 to 14;

• regulation 16; and

• regulation 21.

Records of uncertificated general public sector securities

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• (1) The participating issuer shall enter in a record of uncertificated general public sector securities the same particulars, so far as is practicable, as are required by paragraph 12(1) to be entered in the relevant Operator register of general public sector securities.

• (2) In respect of every participating security which is a general UK Government security, the record of uncertificated general public sector securities shall be kept by the Registrar of Government Stock.

• (3) The participating issuer shall, unless it is impracticable to do so by virtue of circumstances beyond his control, ensure that the record of uncertificated general public sector securities is regularly reconciled with the Operator register of general public sector securities.