The Uncertificated Securities Regulations 2001

• (4) Provided that he has complied with subparagraph (3), a participating issuer shall not be liable in respect of any act or thing done or omitted to be done by him or on his behalf in reliance upon the assumption that the particulars entered in any record of uncertificated general public sector securities which he is required to keep by these Regulations accord with the particulars entered in the Operator register of general public sector securities to which the record relates.

• (5) The provisions of the Bankers' Books Evidence Act 1879¹⁷ shall apply for the purpose of proving any entry in the record of uncertificated general public sector securities as if the participating issuer were a bank and a banker within the meaning of that Act, and as if such entry in the record, or, where the information recorded therein is not in readable form and is later transcribed into readable form, the transcribed version of such entry, were an entry in a banker’s book.

Registers of corporate securities

14

• (1) Where an Operator of a relevant system is required to maintain an Operator register of corporate 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) Sections 743 to 748 of the 2006 Act shall not apply to any part of an Operator register of corporate securities.

Records of uncertificated corporate securities

15

• (1) A participating issuer shall enter in a record of uncertificated corporate securities the same particulars, so far as practicable, as are required by paragraph 14(1) to be entered in the relevant Operator register of corporate securities.

• (2) A participating issuer 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 corporate securities is regularly reconciled with the Operator register of corporate securities.

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

• (4) In the case of a participating issuer which is a company, the record of uncertificated corporate securities shall be kept at the same place as the part of any register of debenture holders maintained by the company would be required to be kept.

• (5) Sections 744(1) to (4) and 746 of the 2006 Act shall apply in relation to a record of uncertificated corporate securities maintained by a participating issuer which is a company, so far as that record relates to debentures, as they apply or would apply to any register of debenture holders maintained by the company; 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.

• (6) Any provision of an enactment or instrument which requires a register of persons holding securities (other than shares or public sector securities) to be open to inspection shall also apply to the record of uncertificated corporate securities relating to any units of those securities which are participating securities.

Miscellaneous

16

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Every register which an Operator is required to maintain by virtue of these Regulations (other than an Operator register of eligible debt securities) which relates to securities issued by a company shall be deemed to be kept—

• (a) in the case of a company registered in England and Wales, in England and Wales; or

• (b) in the case of a company registered in Scotland, in Scotland.

17

• (1) An entry in a register of securities or in a record of securities relating to a person who no longer holds the securities which are the subject of the entry may be removed from the register or the record (as the case may be) after the expiration of 20 years beginning with the day on which the person ceased to hold any of those securities.

• (2) Subparagraph (1) does not apply in respect of an entry in a register of members.

18

Sections 1134, 1135 and 1138 of the 2006 Act shall apply—

• (a) to any register, record or index required to be kept by any person in accordance with these Regulations as they apply to any register, record or index required by the Companies Acts to be kept by a company; and

• (b) to an Operator and its officers as they apply to a company and its officers.

19

• (1) Such sanctions as apply to a company and its officers in the event of a default in complying with section 113 of the 2006 Act shall apply to an Operator and his officers in the event of a default in complying with paragraph 4, 12 or 14.

• (2) Such sanctions as apply to the registrar, within the meaning of the 1974 Regulations, in the event of a default in complying with regulation 5 of those Regulations shall apply to a participating issuer and his officers in the event of a default in complying with paragraph 13 in respect of a local authority security falling within paragraph (a)(i) of the definition of “local authority security.

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

• (3) Such sanctions as apply in the event of a default in complying with the requirement to maintain a register imposed by the relevant enactment or instrument referred to in regulation 22(1) shall apply to—

• (a) a participating issuer other than a company; and

• (b) a participating issuer which is a company, in relation to so much of the record of uncertificated corporate securities as does not relate to debentures,

and his officers in the event of a default in complying with paragraph 15.

• (4) Subparagraphs (2) and (3) 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.

20

An officer of a participating issuer shall be in default in complying with, or in contravention of paragraph 2, 5, 6, 7, 13 or 15, or section 1138 of the 2006 Act as applied by paragraph 18, if, and only if, he knowingly and wilfully authorised or permitted the default or contravention.

21

An officer of an Operator shall be in default in complying with, or in contravention of, the provisions referred to in paragraph 19(1) of this Schedule, or of section 1138 of the 2006 Act as applied by paragraph 18, if, and only if, he knowingly and wilfully authorised or permitted the default or contravention.

SCHEDULE 5 — ADAPTATIONS IN RESPECT OF NORTHERN IRELAND

Column 1	Column 2	Column 3
References to the 1985 Act	Provisions of these Regulations	Reference to the 1986 Order[^f00027]
Section 182	Paragraph 7 of Schedule 7	Article 192
Section 183	Regulations 27(8) and (9), 28(8) and (9), 32(9), 33(11), 38(7) and 42(12) Paragraph 8 of Schedule 7	Article 193
Section 185	Regulations 32(8) and (10) and 42(5) and (6)	Article 195
Section 186	Regulation 38(3)	Article 196
Section 188	Regulation 18	Article 198
Section 190	Paragraph 14 of Schedule 4	Article 199
Section 191	Paragraphs 14 and 15 of Schedule 4	Article 200
Section 192	Regulation 40(2)	Article 201
Section 209	Paragraph 9 of Schedule 7	Article 217
Section 238	Regulation 41(3)	Article 246
Section 352	Regulations 20(7), 21(4) and 22(4) Paragraphs 2, 5 and 19 of Schedule 4	Article 360
Section 352A	Paragraph 3 of Schedule 4	Article 360A
Section 353	Paragraph 6 of Schedule 4	Article 361
Section 354	Paragraph 7 of Schedule 4	Article 362
Section 355	Paragraph 8 of Schedule 4	Article 363
Section 356	Paragraphs 9 and 10 of Schedule 4	Article 364
Section 357	Paragraph 6 of Schedule 4	Article 365
Section 358	Regulation 26	Article 366
Section 359	Paragraph 11 of Schedule 4	Article 367
Section 360	Regulation 40(3)	Article 368
Section 361	Regulation 24(4)	Article 369
Section 370	Regulation 41(3)	Article 378
Section 376	Regulation 16(7)	Article 384
Section 380	Paragraph 10 of Schedule 7	Article 388
Section 428	Regulation 42(13)	Article 421
Section 429	Regulation 42(1), (2), (7), (8) and (13)	Article 422
Section 430	Regulation 42(1), (2), (5), (7), (8), (13) and (14)	Article 423
Section 430D	Regulation 42(13) and (14)	Article 423D
Section 722	Paragraphs 18, 20 and 21 of Schedule 4	Article 671
Section 723	Paragraph 18 of Schedule 4	Article 672
Section 735	Regulation 3(1)	Article 3
Section 744	Regulation 3(1)	Article 2
Paragraph 25 of Schedule 13	Paragraph 9 of Schedule 4	Paragraph 24 of Schedule 13

SCHEDULE 6 — TRANSITORY PROVISIONS

1

Prior to the day on which section 19 of the 2000 Act comes into force, each provision of these Regulations specified in this Schedule shall have effect modified as provided in this Schedule.

2

The definition of “securities” in regulation 3(1) shall be modified by the substitution of the words “the 1986 Act” for the words “section 235 of the 2000 Act”.

3

Regulation 5 shall be modified by the substitution for paragraph (4) of—

(4) Where the Treasury refuse an application for approval they shall give the applicant a written notice to that effect stating the reasons for the refusal.

4

Regulation 7 shall be modified by—

• (a) the insertion in paragraph (2) of the words “subject to paragraph (3)” after the words “they may”; and

• (b) the substitution for paragraphs (3) to (6) of—

(3) Subsections (2) to (7) and (9) of section 11 of the 1986 Act shall apply in relation to the withdrawal by the Treasury of approval from an Operator under paragraph (2) as they apply in relation to the revocation by the Secretary of State of a recognition order under subsection (1) of that section; and in those subsections as they so apply— (a) any reference to a recognised organisation shall be taken to be a reference to an Operator; (b) any reference to members of a recognised organisation shall be taken to be a reference to system-users; (c) any reference to the Secretary of State shall be taken to be a reference to the Treasury; (d) any reference to an order other than a recognition order shall be taken to be a reference to a written instrument; and (e) the reference in subsection (6) to the interests of investors shall be taken to be a reference to the interests of system-users.

5

Regulation 8 shall be modified by—

• (a) the substitution for paragraph (4) of—

(4) Before giving a direction under paragraph (2)(b) the Treasury shall— (a) if the circumstances permit, consult the Operator and afford him an opportunity to make representations; and (b) so far as is practicable to estimate it, have regard to the cost to the Operator of complying with any term of any direction and to the costs to other persons resulting from the Operator’s compliance.

; and

• (b) the omission of paragraphs (5) and (7).

6

In regulation 9—

• (a) paragraph (7) shall be modified by the substitution of the words “Subsections (6) and (7) of section 61 of the 1986 Act” for the words “Subsections (3) to (5) and (8) of section 382 of the 2000 Act”;

• (b) paragraphs (10) to (12) shall be modified by the substitution of the words “investment business within the meaning of the 1986 Act” for the words from “business of any of the following kinds” in paragraph (10) to the end of paragraph (12).

7

Regulation 11(1) shall be modified to read—

(1) If it appears to the Treasury that there is a body corporate— (a) to which functions have been transferred under section 114 of the 1986 Act; and (b) which is able and willing to discharge all or any of the functions conferred by this Part of these Regulations, they may, subject to paragraphs (2) and (5), by instrument in writing delegate all or any of those functions to that body; and a body to which functions are so delegated is referred to in these Regulations as a “designated agency”.

8

In paragraph 5(7) of Schedule 1—

• (a) paragraph (a) of the definition of “clearing house” shall be modified by the substitution of the words “for the purposes of the 1986 Act” for the words “within section 285(1)(b) of the 2000 Act”; and

• (b) paragraph (a) of the definition of “exchange” shall be modified by the substitution of the words “for the purposes of the 1986 Act” for the words “within section 285(1)(a) of the 2000 Act”.

9

Schedule 2 shall be modified by—

• (a) the substitution for subparagraph (5) in paragraph 1 of—

(5) Subsections (2) to (5), (7) and (9) of section 11 of the 1986 Act shall apply in relation to the withdrawal of approval under subparagraph (3) as they apply in relation to the revocation by the Secretary of State of a recognition order under subsection (1) of that section; and in those subsections as they so apply— (a) any reference to a recognised organisation shall be taken to be a reference to an Operator; (b) any reference to members of a recognised organisation shall be taken to be a reference to system-users; (c) any reference to the Secretary of State shall be taken to be a reference to the Treasury; and (d) any reference to an order other than a recognition order shall be taken to be a reference to a written instrument.

• (b) the omission from paragraph 2 of subparagraph (5); and

• (c) the insertion after paragraph 7 of a new paragraph reading—

(8) (1) Before the Treasury exercise a power under paragraph 1(3)(b) or (c), or their power to refuse leave under paragraph 2(2), or their power to give a direction under paragraph 2(4), in respect of an Operator, they shall— (a) give written notice of their intention to do so to the Operator and take such steps (whether by publication or otherwise) as they think appropriate for bringing the notice to the attention of any other person who in their opinion is likely to be affected by the exercise of the power; and (b) have regard to any representation made within such time as they consider reasonable by the Operator or by any such other person. (2) A notice under subparagraph (1) shall give particulars of the manner in which the Treasury propose to exercise the power in question and state the reasons for which they propose to act; and the statement of reasons may include matters contained in any report received by them under paragraph 3.

SCHEDULE 7 — MINOR AND CONSEQUENTIAL AMENDMENTS

Part 1 — Primary Legislation

The National Debt Act 1870

1

In section 3 of the National Debt Act 1870¹⁸, for the definition of “Stockholder” there shall be substituted—

• “Stockholder” means a person holding stock, being entered as such in—a register kept by the Bank of England or the Bank of Ireland under regulation 1 of the Government Stock Regulations 1965; ora register kept by the Operator of a relevant system under the Uncertificated Securities Regulations 2001 (and “Operator” and “relevant system” shall have the same meanings as they have in those Regulations):

The National Debt (Stockholders Relief) Act 1892

2

In subsection (1) of section 2 of the National Debt (Stockholders Relief) Act 1892¹⁹, for the word “inscribed” there shall be substituted “entered in a relevant register”.

The Finance (No. 2) Act 1915

3

In section 48 of the Finance (No. 2) Act 1915²⁰—

• (a) after “Director of Savings,” there shall be inserted “to the Operator of any relevant system”; and

• (b) after “by that person” there shall be inserted “; and in this section “Operator” and “relevant system” have the same meanings as they have in the Uncertificated Securities Regulations 2001”.

The Finance Act 1916

4

In section 67 of the Finance Act 1916²¹—

• (a) after “Director of Savings,” there shall be inserted “the Operator of any relevant system”; and

• (b) at the end of that section there shall be added “; and in this section “Operator” and “relevant system” have the same meanings as they have in the Uncertificated Securities Regulations 2001”.

The Finance Act 1949

5

In section 48 of the Finance Act 1949²²—

• (a) in subsection (1), after “Bank of England” where it first appears there shall be inserted “or the Operator of any relevant system”;

• (b) in the proviso to subsection (1)—

• (i) for “the Bank of England shall not” there shall be substituted “neither the Bank of England nor any such Operator shall”; and

• (ii) for “to the Bank” there shall be substituted “to the Bank, or to that Operator as the case may be,”;

• (c) in subsection (2), after “Bank of England” there shall be inserted “or the Operator, as the case may be,”; and

• (d) after subsection (4) the following subsection shall be added—

(5) In this section, “Operator” and “relevant system” have the same meanings as they have in the Uncertificated Securities Regulations 2001.

The Finance (No. 2) Act 1975

6

In section 73 of the Finance (No. 2) Act 1975²³—

• (a) in subsection (4), after “means” in the definition of “the Bank” there shall be inserted “(subject to subsection (4A))”; and

• (b) after subsection (4) the following subsection shall be added—

(4A) In the case of units of stock which are recorded on a register kept by the Operator of a relevant system— (a) the reference to the Bank in subsection (1) so far as it relates to paragraph (c) of that subsection; and (b) the references to the Bank in subsections (2) and (3) so far as they apply for the purposes of that paragraph, shall be taken to be references to that Operator; and in this subsection “Operator” and “relevant system” have the same meanings as in the Uncertificated Securities Regulations 2001.

The Companies Act 1985

7

In subsection (1)(b) of section 182 of the 1985 Act, after “simplified process)” there shall be inserted “and to regulations made under section 207 of the Companies Act 1989 (which enable title to securities to be evidenced and transferred without a written instrument).”.

8

In subsection (1) of section 183 of that Act, after “Stock Transfer Act 1982” there shall be inserted “or is in accordance with regulations made under section 207 of the Companies Act 1989.”.

9

In section 209(9B)(b) of the 1985 Act, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.

10

In subsection (4) of section 380 of the 1985 Act, after paragraph (k) the following paragraphs shall be added—

(l) a resolution of the directors passed by virtue of regulation 16(2) of the Uncertificated Securities Regulations 2001 (which allows title to a company’s shares to be evidenced and transferred without written instrument); and (m) a resolution of a company passed by virtue of regulation 16(6) of the Uncertificated Securities Regulations 2001 (which prevents or reverses a resolution of the directors under regulation 16(2) of those Regulations).

The Financial Services Act 1986

11

In subsection (1) of section 180 of the 1986 Act, after paragraph (n) the following paragraph shall be added—

(nn) to an Operator approved under the Uncertificated Securities Regulations 2001 if the information is necessary to ensure the proper functioning of a relevant system within the meaning of those Regulations in relation to defaults and potential defaults by market-participants;

12

In the 1986 Act, in—

• (a) paragraph 16A(a) of Schedule 1;

• (b) Note (3) to that paragraph; and

• (c) subparagraph (5B)(a) of paragraph 18 of Schedule 1,

for “Uncertificated Securities Regulations 1995” in each place where it occurs there shall be substituted “Uncertificated Securities Regulations 2001”.

The Banking Act 1987

13

In the Banking Act 1987²⁴, in—

• (a) paragraph 11B in the first column of the Table in section 84(1);

• (b) section 84(11)(e),

for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.

Part 2 — Subordinate Legislation

The Government Stock Regulations 1965

14

In the 1965 Regulations—

• (a) in regulation 1(3), for “Subject (in the case of stock which is a participating security) to any provision made by or under the 1995 Regulations, in” there shall be substituted “In”;

• (b) in regulation 2(1), for “Subject to Regulation 5 of the Stock Transfer (Gilt-edged Securities) (CGO Service) Regulations 1985 and (in the case of stock which is a participating security) any provision made by or under the 1995 Regulations, every” there shall be substituted “Every”;

• (c) in regulation 3B(2), for “the register” there shall be substituted—

(a) a register kept under regulation 1(1) or (1A) hereof; or (b) a register kept by the Operator of a relevant system under the 2001 Regulations,

• (d) in regulation 4²⁵—

• (i) the words “and Regulation 4B” shall be omitted from paragraph (1);

• (ii) after paragraph (4) there shall be inserted—

(5) Units of stock which are recorded on a register kept by the Operator of a relevant system under the 2001 Regulations shall be transferable in no other manner than by means of that system in accordance with those Regulations. (6) A strip shall be transferable in no other manner than by means of a relevant system operated by an Operator in accordance with the 2001 Regulations.

• (e) in regulation 5, for “Subject (in the case of stock which is a participating security) to any provision made by or under the 1995 Regulations, the” there shall be substituted “The”;

• (f) in regulation 10—

• (i) for “Subject (in the case of stock which is a participating security) to any provision made by or under the 1995 Regulations, the” there shall be substituted “The”; and

• (ii) there shall be omitted the words from “or, in the case of an exempt transfer” to the end;

• (g) in regulation 14(6), 15(4) and 16(4)—

• (i) there shall be omitted the words “to Regulation 4B and”; and

• (ii) for “the 1995 Regulations” there shall be substituted “the 2001 Regulations”;

• (h) in regulation 23(1), for ““the 1995 Regulations” means the Uncertificated Securities Regulations 1995 as amended from time to time;” there shall be substituted ““the 2001 Regulations” means the Uncertificated Securities Regulations 2001 as amended from time to time;”;

• (i) in regulation 23(1), the definitions of “the CGO Service”; “CGO Service member”; and “an exempt transfer” shall be omitted; and

• (j) in regulation 23(1A), for “the 1995 Regulations” there shall be substituted “the 2001 Regulations”.

The Local Authority (Stocks and Bonds) Regulations 1974

15

In the 1974 Regulations—

• (a) in regulation 1(3)—

• (i) for ““the 1995 Regulations” means the Uncertificated Securities Regulations 1995 as amended from time to time;” there shall be substituted ““the 2001 Regulations” means the Uncertificated Securities Regulations 2001 as amended from time to time;”; and

• (ii) the definitions of “the CGO Service”; “CGO Service member”; “the CGO Service Regulations”; and “exempt transfer” shall be omitted;

• (b) in regulation 6(1), for “Subject to regulation 6A below the” there shall be substituted “The”;

• (c) in regulation 7—

• (i) in paragraph (1)(a), for “paragraph (5)” there shall be substituted “paragraph (1A)”;

• (ii) after paragraph (1) there shall be inserted as a new paragraph—

(1A) Units of stock, or of bonds, which are recorded on a register kept by the Operator of a relevant system under the 2001 Regulations shall be transferable in no other manner than by means of that system in accordance with those Regulations.

; and

• (iii) in paragraph (3), there shall be omitted “and any record of a transfer effected through the medium of the CGO Service,” and “or, as the case may be, the exempt transfer”; and

• (d) in regulation 13(2)—

• (i) for “Subject (in the case of stock or a bond which is a participating security) to any provision made by or under the 1995 Regulations, the” there shall be substituted “The”; and

• (ii) there shall be omitted the words from “or, in the case of an exempt transfer” to the end.

The Exchange of Securities (General) Rules 1979

16

In the Exchange of Securities (General) Rules 1979²⁶—

• (a) in rule 3, the definitions of “the CGO Service”; “CGO Service member”; and “an exempt transfer” shall be omitted; and

• (b) in rule 6—

• (i) for paragraph (1A) there shall be substituted—

(1A) Where the acceptance relates to a holding of uncertificated units of a security and at the time of acceptance that holding is transferable by means of a relevant system in accordance with the Uncertificated Securities Regulations 2001 as amended from time to time— (a) paragraph (1)(c) of this Rule shall not apply, and (b) the acceptance may be made by such means of electronic communication, and subject to such conditions, as the Treasury may approve for that purpose.

; and

• (ii) there shall be inserted as a new paragraph after paragraph (1A)—

(1B) In paragraph (1A), the expressions “uncertificated units of a security” and “relevant system” shall have the same meanings as they have in the Uncertificated Securities Regulations 2001.

The Companies (Registers and other Records) Regulations 1985

17

In the Companies (Registers and other Records) Regulations 1985²⁷—

• (a) in regulation 1—

• (i) in paragraph (2), at the end of the definition of “register” there shall be inserted “or regulation 20 of the 2001 Regulations”; and

• (ii) at the end of paragraph (2) there shall be inserted—

• “the 2001 Regulations” means the Uncertificated Securities Regulations 2001; and expressions defined in the 2001 Regulations shall have the same meaning in these Regulations.

• (b) at the end of regulation 2 there shall be inserted as new paragraphs—

(5) This regulation applies with respect to an issuer of register members and a record of uncertificated shares which is kept by a company by recording the matters in question otherwise than in legible form— (a) as it applies to a register of members under the Act which is kept in like fashion; and (b) as if references to the Act were references to the 2001 Regulations. (6) This Regulation applies with respect to an index kept by virtue of paragraph 7 of Schedule 4 to the 2001 Regulations which is kept by a company by recording the matters in question otherwise than in legible form— (a) as it applies to an index of a register of members under the Act which is kept in like fashion; and (b) as if references to the Act were references to the 2001 Regulations.

• (c) at the end of regulation 3 there shall be inserted as a new paragraph—

(6) In the case of a company which is a participating issuer, references in this regulation to the register of members shall be taken to be a reference to the company’s issuer register of members and record of uncertificated shares.

; and

• (d) in regulation 6—

• (i) in paragraph (1), after “the Act” there shall be inserted “or the 2001 Regulations”; and

• (ii) after paragraph (2) there shall be inserted as a new paragraph—

(2A) In the case of a company which is a participating issuer, paragraph (2) shall apply as if— (a) references to the register of members were references to the company’s issuer register of members and record of uncertificated shares; and (b) the reference to the index of the register of members were a reference to an index kept by virtue of paragraph 7 of Schedule 4 to the 2001 Regulations.

The Stamp Duty Reserve Tax Regulations 1986

18

In the Stamp Duty Reserve Tax Regulations 1986²⁸, in the definition of “the Treasury Regulations” in regulation 2, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.

The Companies (Registers and other Records) Regulations (Northern Ireland) 1986

19

In the Companies (Registers and other Records) Regulations (Northern Ireland) 1986 ²⁹—

• (a) in regulation 1—

• (i) at the end of the definition of “register” in paragraph (2) there shall be inserted “or regulation 20 of the 2001 Regulations”; and

• (ii) at the end of paragraph (2) there shall be inserted—

• “the 2001 Regulations” means the Uncertificated Securities Regulations 2001; and expressions defined in the 2001 Regulations shall have the same meaning in these Regulations.

• (b) at the end of regulation 3 there shall be inserted as new paragraphs—

(5) This Regulation applies with respect to an issuer register of members and a record of uncertificated shares which is kept by a company by recording the matters in question otherwise than in legible form— (a) as it applies to a register of members under the Order which is kept in like fashion; and (b) as if references to the Order were references to the 2001 Regulations. (6) This Regulation applies with respect to an index kept by virtue of paragraph 7 of Schedule 4 to the 2001 Regulations which is kept by a company by recording the matters in question otherwise than in legible form— (a) as it applies to an index of a register of members under the Order which is kept in like fashion; and (b) as if references to the Order were references to the 2001 Regulations.

• (c) at the end of regulation 4 there shall be inserted as a new paragraph—

(6) In the case of a company which is a participating issuer, references in this regulation to the register of members shall be taken to be a reference to the company’s issuer register of members and record of uncertificated shares.

• (d) in regulation 7—

• (i) in paragraph (1), after “the Order” there shall be inserted “or the 2001 Regulations”; and

• (ii) after paragraph (2) there shall be inserted as a new paragraph—

(2A) In the case of a company which is a participating issuer, paragraph (2) shall apply as if— (a) references to the register of members were references to the company’s issuer register of members and record of uncertificated shares; and (b) the reference to the index of the register of members were a reference to an index kept by virtue of paragraph 7 of Schedule 4 to the 2001 Regulations.

The Financial Markets and Insolvency Regulations 1996

20

In the Financial Markets and Insolvency Regulations 1996³⁰—

• (a) in regulation 2(1)—

• (i) in the definition of “register of securities”, for “a register maintained by the issuer, whether by virtue of the 1995 Regulations or otherwise” there shall be substituted “a register, whether maintained by virtue of the Uncertificated Securities Regulations 2001 or otherwise”;

• (ii) the definition of “the 1995 Regulations” shall be omitted;

• (iii) in the definition of “relevant nominee”, for “paragraph 19(d) of Schedule 1 to the 1995 Regulations” there shall be substituted “paragraph 25(f) of Schedule 1 to the Uncertificated Securities Regulations 2001”;

• (iv) in the definition of “transfer”, for “the generation of an Operator-instruction requiring a participating issuer to register a system-member on the relevant register of securities as the holder of those units;” there shall be substituted “the registration of a transfer of title to those units in the relevant Operator register of securities;”; and

• (v) in the full-out to regulation 2(1), for “the 1995 Regulations” there shall be substituted “the Uncertificated Securities Regulations 2001”;

• (b) in regulation 2(2)(a), for “regulation 19 of the 1995 Regulations” there shall be substituted “regulation 20, 21 or 22 of the Uncertificated Securities Regulations 2001”; and

• (c) in regulation 5(a)(ii), for “regulation 25(1)(a) or 25(2)(a) of the 1995 Regulations” there shall be substituted “regulation 31(2)(b) or 31(4)(b) of the Uncertificated Securities Regulations 2001”.

The Stock Transfer (Addition and Substitution of Forms) Order 1996

21

In the Stock Transfer (Addition and Substitution of Forms) Order 1996³¹, in paragraph (2) of article 1, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.

The Financial Services Act 1986 (Exemption) Order 1996

22

In the Financial Services Act 1986 (Exemption) Order 1996³², in paragraph (3) of article 1, for “Uncertificated Securities Regulations 1995” in both places where it occurs there shall be substituted “Uncertificated Securities Regulations 2001”.

The Stamp Duty Reserve Tax (UK Depository Interests in Foreign Securities) Regulations 1999

23

In the Stamp Duty Reserve Tax (UK Depository Interests in Foreign Securities) Regulations 1999³³, in the definition of “foreign securities” in regulation 2, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.

The Open-Ended Investment Companies Regulations 2001

24

In the Open-Ended Investment Companies Regulations 2001—

• (a) in regulation 2(1), the definitions of “certificated form”, “participating issuer”, “participating security”, “uncertificated form” and “uncertificated unit of a security” shall be omitted;

• (b) for regulation 50(2) there shall be substituted—

(2) Paragraph (1) has effect subject to any requirements contained in FSA rules.

; and

• (c) in paragraph 2(1) of Schedule 3, the words “Subject to sub-paragraph (2)” shall be omitted.

Signed

Anne McGuire — John Heppell — Two of the Lords Commissioners of Her Majesty’s Treasury — 23rd November 2001

Explanatory note

(This note is not part of the Regulations)

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

2 Regulations 2 and 3 set out the purposes of and definitions used in the Regulations. A unit of a security which may be transferred by means of the relevant system is referred to as an “uncertificated” unit. A security, the units of which may become uncertificated, is referred to as a “participating security”. An issuer who issues a participating security is, in relation to that security, referred to as a “participating issuer”. Instructions sent by means of the relevant system are referred to as “dematerialised instructions”.

3 Regulations 4 to 13 make provision for the approval of the Operator by the Treasury if it appears to them that he, his rules and any relevant system meet certain criteria specified in Schedule 1. The Regulations give the Treasury certain powers in relation to the Operator if he, his rules or the relevant system, fails to meet the criteria, or if necessary for the performance of their functions under the Regulations. Provision is also made for the delegation by the Treasury of their functions under the Regulations to the Financial Services Authority, which is referred to in the Regulations as the “designated agency” when carrying out functions which have been so delegated. Schedule 2 provides for oversight by the Director General of Fair Trading of the rules and guidance of the Operator to ensure that they do not distort competition. Schedule 3 sets out the procedure to be followed before refusing or withdrawing approval as an Operator, giving a direction to an Operator, or exercising certain powers under Schedule 2.

4 Regulations 14 to 19 set out the conditions on which issuers may allow securities issued by them to become participating securities and hence to be held in uncertificated form and transferred by means of the relevant system. Provision is made for a class of shares governed by articles of association which are in all respects consistent with the Regulations to become a participating security. Provision is also made for the directors of a company to pass a “directors' resolution” so that other classes of shares can become participating securities notwithstanding any contrary provisions in the articles of association, and for the members of the company to prevent or reverse a directors' resolution. Conditions are specified for securities other than shares to become participating securities. Transitional provision is made in respect of securities which were participating securities for the purposes of the Uncertificated Securities Regulations 1995. The 1995 Regulations are superseded by these Regulations.

5 Regulations 20 to 26 (together with Schedule 4) make provision for the keeping of “registers of securities” and “records of securities” in respect of participating securities. In particular, provision is made for the keeping by the Operator of registers recording persons holding uncertificated units of a participating security, and for the legal effect of entries on the registers which the Regulations require to be kept. Provision is also made in respect to the rectification or closing of such registers.

6 Regulations 27 to 30 make provision for the registration of transfers of title to units of a participating security. Provision is made for registration by the Operator of a transfer of title to an uncertificated unit of a security in certain circumstances (in particular, upon settlement of the transfer in accordance with the Operator’s rules). Provision is also made for a participating issuer, subject to a number of exceptions, to register the transfer of title to a relevant unit of a security following an Operator-instruction to do so. Further provision is made to allow the Operator to register two or more transfers of uncertificated units of a security on a net basis, or simultaneously, in certain circumstances.

7 Regulation 31 applies in a case in which, as a consequence of a transfer of a unit of a participating security, that unit ceases to be held in uncertificated form, so that the transfer of title to the unit is therefore required to be registered on a register of securities kept by the participating issuer. Provision is made for the transferee to acquire a property right in such units of a security before his name appears on the register of securities kept by the participating issuer. Other than in the case of Scottish securities, the transferee acquires an equitable interest in a number of units calculated in accordance with the regulation. In relation to Scottish securities, the transferor is deemed to hold on trust for the transferee a number of units which is calculated in the same way.

8 Regulations 32 to 34 make provision for the conversion of units of a participating security between certificated and uncertificated form, and for the issue of new units of a participating security in uncertificated form.

9 Regulation 35 prevents persons who send certain dematerialised instructions, and persons on whose behalf they are sent, from denying particular matters relating to the instructions. It also makes provision for persons receiving such instructions to accept, with certain exceptions, that the information contained in them and matters relating to them are correct.

10 Regulation 36 provides that the Operator is liable, in certain circumstances, if a person suffers loss as a result of the sending of certain dematerialised instructions, or the making of certain amendments to a register of securities kept by the Operator.

11 Regulations 37 and 38 amend certain references in enactments and rules of law, and disapply certain formalities and requirements.

12 Regulation 39 preserves the Operator’s right to charge for carrying out functions under these Regulations, other than charging a participating issuer for maintaining an Operator register of securities.

13 Regulation 40 makes provision for trustees and personal representatives to use a relevant system and for debentures to be held in uncertificated form and transferred by means of a relevant system.

14 Regulation 41 makes provision for giving notices of meetings and for sending copies of certain documents.

15 Regulations 42 and 43 make provision relating to take-overs of companies with shares held in uncertificated form.

16 Regulation 44 makes provision as to the determination of actual notice of a fact, matter or thing for the purposes of the Regulations.

17 Regulation 45 provides that certain obligations to which the Regulations would otherwise give rise do not arise in the case of a wholly dematerialised security as defined in regulation 3(1).

18 Regulations 46 to 48 makes provision as to liability for defaults and contraventions. Provision is made for participating issuers to be liable for breach of statutory duty for contravening certain regulations, and for the liability of officers of participating issuers and the Operator in respect of certain contraventions. Provision is also made for certain exemptions from liability.

19 Regulation 49 and Schedule 5 adapt the Regulations as they apply to Northern Ireland.

20 Regulation 50 gives effect to Schedule 6, which sets out the modified form in which certain provisions of the Regulations will take effect before the main provisions of the Financial Services and Markets Act 2000 come into force.

21 Regulation 51 gives effect to Schedule 7 which makes minor and consequential amendments to certain enactments.

22 Regulation 52 revokes certain enactments, including the Uncertificated Securities Regulations 1995.

Footnotes

Editorial notes