(1)For the purposes of this Part there is a stock lending arrangement in respect of securities if—
(a)a person (“the lender”) has transferred the securities to another person (“the borrower”) otherwise than by way of sale,
(b)the securities are UK shares, UK securities or overseas securities,
(c)the transfer is under an arrangement between the lender and the borrower, and
(d)under the arrangement, the borrower is required to transfer the securities back to the lender otherwise than by way of sale.
(2)The reference in subsection (1)(d) to the transfer of the securities back to the lender includes a reference to—
(a)a transfer within subsection (3), and
(b)a payment within subsection (5).
(3)A transfer is within this subsection if it is a transfer to the lender of securities of the same description as the securities—
(a)in accordance with a requirement to do so, or
(b)in exercise of a power to substitute securities of the same description for the securities that are required to be transferred back.
(4)For the purposes of subsection (3), securities are taken to be of the same description as other securities if (and only if) they—
(a)are in the same quantities,
(b)give the same rights against the same persons, and
(c)are of the same type and nominal value,
as the other securities.
(5)A payment is within this subsection if it is a payment to the lender, in pursuance of a redemption obligation, of an amount equal to the amount of the entitlement under the redemption obligation.
(6)A redemption obligation is an obligation that arises on a person’s becoming entitled to receive an amount in respect of the redemption of the securities.