The Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations 1997

Explanatory Note

(This note is not part of the Regulations)

With effect from 20th October 1997 (being the day appointed by S.I. 1997/2428 (c. 95)), sections 97, 98, 102 and 103 of the Finance Act 1997 (c. 16) introduce new rules conferring relief from stamp duty and stamp duty reserve tax for intermediaries trading in United Kingdom securities, and similar relief in connection with stock borrowing and sale and repurchase arrangements.

The new rules supersede the provisions conferring relief for intermediaries trading on the London International Financial Futures and Options Exchange (“LIFFE”) and contained in the Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations 1992 (S.I. 1992/570) (“the 1992 Regulations”). The present Regulations, which have effect from 20th October 1997, reproduce those provisions of the 1992 Regulations which relate to relief for persons other than intermediaries trading on LIFFE and add a further provision relating to relief for such persons. The Regulations also revoke the 1992 Regulations.

Regulation 1 provides for citation, commencement and effect, and regulation 2 for interpretation.

Regulation 3 prescribes for the purposes of the Regulations—

• LIFFE Administration and Management as a recognised investment exchange

• The London Clearing House Limited as a recognised clearing house.

Regulation 4 exempts from stamp duty or stamp duty reserve tax transfers of securities, or agreements to transfer securities, to The London Clearing House Limited (or its nominee) in its capacity as a clearer of transactions on LIFFE resulting from the exercise of options.

Regulation 5 exempts from stamp duty or stamp duty reserve tax transfers of securities, or agreements to transfer securities, resulting from the exercise of options to receive securities, in cases where the transfer or agreement to transfer is from a member of LIFFE who is not authorised to clear transactions on that exchange, or his nominee, to a member who is so authorised (“clearing member”), or his nominee, or from The London Clearing House Limited (in its capacity as a clearer of transactions on LIFFE) or its nominee to a clearing member or his nominee.

Regulation 6 revokes the 1992 Regulations as respects instruments or agreements in relation to which the present Regulations have effect.