The Banking Act 1987 (Exempt Transactions) Regulations 1997

Citation, commencement and interpretation

1.—(1) These Regulations may be cited as the Banking Act 1987 (Exempt Transactions) Regulations 1997, and shall come into force on 3rd April 1997.

(2) In these Regulations, unless the context otherwise requires—

“the Act” means the Banking Act 1987;

“Approved Organisation” means an exchange or association not in an EEA State which meets criteria agreed between the Securities and Investments Board and the Stock Exchange and is included in a list maintained by the Stock Exchange for the purposes of the Rules of the Stock Exchange(1);

“authorised institution” means an institution authorised under the Act;

“certified translation” means a translation certified to be a correct translation in the manner prescribed in regulation 6 of the Companies (Forms) Regulations 1985(2) or in regulation 6 of the Companies (Forms) (Northern Ireland) Regulations 1986(3);

“commercial paper” means a debt security which must be redeemed before the first anniversary of the date of issue;

“company” means a body corporate, including a body corporate constituted under the law of a country or territory outside the United Kingdom;

“competent authority” in relation to another EEA State, means an authority appointed by that State pursuant to Article 18 of Council Directive No. 80/390/EEC(4) to approve listing particulars or a body competent pursuant to Articles 7, 8 and 12 of Council Directive No. 89/298/EEC(5) to approve prospectuses;

“debt security” includes bonds, notes, debentures and debenture stock;

“deposit”, except in the expressions “pre-contract deposit” and “deposit fund”, shall be construed in accordance with section 5 of the Act(6);

“EEA Exchange” means an exchange in an EEA State other than the United Kingdom on which securities may be officially listed in accordance with Council Directive No. 80/390/EEC;

“EEA State” means a State which is a contracting party to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992(7) as adjusted by the Protocol signed at Brussels on 17th March 1993(8);

“European authorised institution” and “European institution” have the meaning given by regulation 3 of the Banking Coordination (Second Council Directive) Regulations 1992(9);

“European investment firm” has the meaning given by regulation 3 of the Investment Services Regulations 1995(10);

“exempt transaction” shall be construed in accordance with regulation 2 below;

“home-regulated investment business”, in relation to a European institution, has the meaning given by regulation 2 of the Banking Coordination (Second Council Directive) Regulations 1992 and in relation to a European investment firm, has the meaning given by regulation 2 of the Investment Services Regulations 1995;

“industrial and provident society” means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965(11) or under the Industrial and Provident Societies Act (Northern Ireland) 1969(12) but does not include a credit union within the meaning of the Credit Unions Act 1979(13) or the Credit Unions (Northern Ireland) Order 1985(14);

“the listing rules” means any rules made pursuant to section 142(6) of the Financial Services Act 1986(15);

“longer term debt security” means a debt security which may not be redeemed in whole or in part until the third anniversary of the date of issue;

“net assets” has the meaning ascribed to it by section 264(2) of the Companies Act 1985(16);

“the Official List” means the Official List of the Stock Exchange;

“recognised European document” has the meaning given by paragraph 2 of Schedule 4 to the Public Offers of Securities Regulations 1995(17);

“redemption value”, in relation to any debt security, means the amount of principal which is payable upon redemption of that security;

“relevant debt security” means a debt security which is commercial paper, a shorter term debt security or a longer term debt security;

“relevant information” means—

(a)

for debt securities falling within regulation 13(4)(b) below which are not issued as part of a programme—

(i)

either of the following documents—

(aa)

the listing particulars and any supplement to it approved by a competent authority in accordance with Council Directive No. 80/390/EEC; or

(bb)

the public offer prospectus and any supplement to it approved by a competent authority in accordance with Council Directive No. 89/298/EEC and recognised as listing particulars in the EEA State where the application for admission to official listing of the debt securities was made; and

(ii)

any other document required to be published as a condition of or by virtue of the admission to official listing of such debt securities under the rules of the EEA Exchange or by the relevant regulatory body in the EEA State where the official listing is sought or obtained; and

(iii)

such of the following additional information as is not included in the listing particulars or the public offer prospectus for such debt securities—

(aa)

a summary of the tax treatment relevant to United Kingdom resident holders of the debt securities;

(bb)

the names and addresses of the paying agents for the debt securities in the United Kingdom (if any); and

(cc)

a statement of how notice of meetings and other notices from the issuer of the debt securities will be given to United Kingdom resident holders of the debt securities; or

(b)

for debt securities falling with regulation 13(4)(b) below which are issued as part of a programme—

(i)

either of the documents referred to in sub-paragraph (i) of paragraph (a) above in relation to the programme, to any previous issues made under it listed on the same EEA Exchange and to the current issue approved in any event not more than one year before the date when the acceptance of the deposit intended to be an exempt transaction under regulation 13(3) below is proposed;

(ii)

any other document required to be published as a condition of or by virtue of the admission to official listing of the programme, of any previous issues made under it listed on the same EEA Exchange or of the current issue under the rules of the EEA Exchange or by the relevant regulatory body in the EEA State where the listing is sought or obtained and published in any event not more than one year before the date when acceptance of the deposit intended to be an exempt transaction under regulation 13(3) below is proposed; and

(iii)

any information referred to in sub-paragraph (iii) of paragraph (a) above which is not included in the listing particulars, public offer prospectus or any pricing supplement for the current issue; or

(c)

for debt securities and shares falling within regulation 13(2)(b) or (4)(d) below and for debt securities and shares issued by a company described in regulation 13(2)(d)(ii) below—

(i)

either of the following documents—

(aa)

the listing particulars and any supplement to it approved by a competent authority in accordance with Council Directive No. 80/390/EEC; or

(bb)

the public offer prospectus and any supplement to it approved by a competent authority in accordance with Council Directive No. 89/298/EEC and recognised as listing particulars in the EEA State in which the application for admission to official listing of the debt securities or shares was made; and

(ii)

any other document required to be published as a condition of or by virtue of the admission to official listing of such debt securities or shares under the rules of the EEA Exchange or by the relevant regulatory body in the EEA State where the official listing is obtained and published in any event not more than two years before the date when the acceptance of the deposit intended to be an exempt transaction under regulation 13(1) or (3) below is proposed; and

(d)

for debt securities and shares falling within regulation 13(2)(b) or (4)(d) below, for debt securities and shares issued by a company described in regulation 13(2)(d)(ii) below and for debt securities falling within regulation 13(4)(b) below—

(i)

a description of any partial exemption or partial derogation granted pursuant to Council Directive No. 80/390/EEC or to Council Directive No. 89/298/EEC by the competent authority responsible for approving the listing particulars or, as the case may be, the public offer prospectus; and

(ii)

a certified translation of any document referred to in paragraph (a), (b) or (c) above or in sub-paragraph (i) of this paragraph which is not in English;

“relevant regulatory body” means the body in another EEA State which regulates an EEA Exchange in that State or which regulates offers or issues of shares or debt securities to be traded on such an exchange;

“selling document” means any prospectus or listing particulars or supplements thereto, any information memorandum, offering circular and pricing supplement and any other similar document produced in connection with the issue of relevant debt securities;

“shorter term debt security” means a debt security which may not be redeemed in whole or in part until the first anniversary of the date of issue and which must be redeemed before the third anniversary of the date of issue;

“the Stock Exchange” means the London Stock Exchange Limited;

“subsidiary” and “wholly-owned subsidiary” shall be construed in accordance with section 736 of the Companies Act 1985(18); and

“successor” in relation to a body, means any company in which property, rights and liabilities of the body shall have become vested by virtue of an Act.

Exempt transactions

2.  The transactions referred to in the following regulations are prescribed for the purposes of section 4(4) of the Act as transactions to which the prohibition in section 3 of the Act on the acceptance of a deposit does not apply. Such transactions are referred to in these Regulations as “exempt transactions”.

Charities

3.—(1) The acceptance by a charity of a deposit is an exempt transaction if—

(a) the deposit is made by another charity, or

(b) there is payable in respect of the deposit neither interest nor a premium.

(2) In this regulation “charity” means any institution, trust or undertaking, whether corporate or not, which is established solely for charitable purposes, and in the application of this regulation to Scotland “charitable” shall be construed in the same way as in the Income Tax Acts.

Church deposit funds

4.—(1) The acceptance by the Central Board of Finance of the Church of England of a deposit in the course of administering a deposit fund within the meaning of paragraph 1 of the scheme contained in the Schedule to the Church Funds Investment Measure 1958(19) is an exempt transaction.

(2) The acceptance by the Central Finance Board of the Methodist Church of a deposit in the course of administering a deposit fund within the meaning of paragraph 1 of the scheme contained in the First Schedule to the Methodist Church Funds Act 1960(20) is an exempt transaction.

Industrial and provident societies

5.  The acceptance by an industrial and provident society of a deposit in the form of withdrawable share capital is an exempt transaction.

Agricultural, forestry and fisheries associations

6.—(1) Without prejudice to regulation 5, the acceptance by an association to which section 33 of the Restrictive Trade Practices Act 1976(21) applies of a deposit by a member of that association is an exempt transaction.

(2) The reference in paragraph (1) above to a member of an association to which section 33 of the Restrictive Trade Practices Act 1976 applies includes a reference to—

(a) a member of any such association which is a member of that association; and

(b) a prospective member, provided that the deposit is made in order to qualify him for membership of the association.

Retail and other co-operative societies

7.—(1) Without prejudice to regulation 5, the acceptance by a co-operative society of a deposit is an exempt transaction if the society fulfils the requirements of paragraph (2) below and the deposit is not taken in breach of the society’s obligations under the Scheme.

(2) The requirements of this paragraph are—

(a) that the society is an industrial and provident society;

(b) that either—

(i) the principal business of the society is the sale by retail of goods for the domestic or personal use of individuals dealing with the society, or the provision of services for such individuals; or

(ii) at least seventy-five per cent. of the votes which may be cast to determine the conduct of the society’s affairs and at least ninety per cent. of its shares by reference to their nominal value are held by qualifying shareholders; or

(iii) the principal business of the society is the sale of goods or the provision of services to societies fulfilling the requirements of paragraph (i) above; and

(c) the society participates in the Scheme and accordingly is a Participating Society within the meaning of clause 2(4) thereof.

(3) In this regulation—

(a) references to the Scheme are to the Scheme constituted by deed dated the 29th February 1980 between the Co-operative Union Limited of the one part and the Co-operative Bank Limited of the other part (as amended by qualifying resolutions of Participating Societies (as therein defined) dated 29th May 1989 and 15th January 1997) the provisions of which are set out in Schedule 1 to these Regulations, and such references do not include references to the Scheme as subsequently amended or varied;

(b) the reference to qualifying shareholders is to industrial and provident societies which have the principal business described in paragraph (2)(b)(i) of this regulation and societies which are registered within the meaning of the Friendly Societies Act 1974(22) or are registered and incorporated within the meaning of the Friendly Societies Act 1992(23).

Solicitors

8.—(1) The acceptance by a practising solicitor in the course of his profession of a deposit is an exempt transaction.

(2) In this regulation “practising solicitor” means a solicitor who is qualified to act as such under section 1 of the Solicitors Act 1974(24), article 4 of the Solicitors (Northern Ireland) Order 1976(25) or section 4 of the Solicitors (Scotland) Act 1980(26), and in Scotland includes a firm of practising solicitors.

Deposits accepted in the course of estate agency work

9.—(1) The acceptance in the course of estate agency work of a deposit which is a pre-contract deposit is an exempt transaction.

(2) In this regulation “estate agency work” has the meaning assigned to it by section 1(1) of the Estate Agents Act 1979(27), and “pre-contract deposit” has the meaning assigned to it by section 12(3) of that Act.

Certain public undertakings

10.—(1) Subject to paragraph (2) below, the acceptance by a body listed in Schedule 2 to these Regulations of a deposit made by another such body is an exempt transaction.

(2) Paragraph (1) above shall apply to a successor only so long as each of its issued shares is held by, or by a nominee of, the Treasury or the Secretary of State.

Student Loans Company Limited

11.—(1) The acceptance by Student Loans Company Limited of a deposit made by a government department is an exempt transaction if the deposit is accepted in furtherance of arrangements made by the Secretary of State under the Education (Student Loans) Act 1990(28), or by the Department of Education for Northern Ireland under the Education (Student Loans) (Northern Ireland) Order 1990(29), for enabling eligible students to receive loans towards their maintenance.

(2) In this regulation “eligible students” has the meaning ascribed to it by sections 1(2) of the Education (Student Loans) Act 1990 or, as the case may be, Article 3(2) of the Education (Student Loans) (Northern Ireland) Order 1990.

The National Children’s Charities Fund

12.  The acceptance by The National Children’s Charities Fund of a deposit is an exempt transaction if the deposit is accepted on terms that no interest or premium shall be payable in respect thereof unless the total amount of deposits by that person with The National Children’s Charities Fund exceeds £10,000.

Relevant debt securities

13.—(1) The acceptance of a deposit by a person (not being a body to which regulation 10(1) above applies) on terms involving the issue of commercial paper is an exempt transaction if the requirements in paragraph (2) below and in paragraphs (1), (2) and (5) of regulation 14 below are met.

(2) The requirements to be met under this paragraph are—

(a) shares or debt securities issued by the person accepting the deposit, being a company with adequate net assets, have been admitted to the Official List; or

(b) shares or debt securities issued by the person accepting the deposit, being a company with adequate net assets, have been admitted to official listing on an EEA Exchange and relevant information in connection with such shares or debt securities has been lodged by the issuing company with the Stock Exchange; or

(c) debt securities issued by the person accepting the deposit, being the government of any country or territory, or a public authority, outside the United Kingdom, have been admitted to trading on the Stock Exchange, to the Official List, to trading or official listing on an EEA Exchange or to trading or listing on an Approved Organisation; or

(d) the commercial paper issued in relation to the acceptance of the deposit is the subject of a guarantee to the holder of the repayment of the principal and the payment of any interest or premium in connection therewith from—

(i) a company with adequate net assets the shares or debt securities of which have been admitted to the Official List; or

(ii) a company with adequate net assets the shares or debt securities of which have been admitted to official listing on an EEA Exchange and which has lodged the relevant information in connection with those shares or debt securities with the Stock Exchange; or

(iii) the government of any country or territory outside the United Kingdom the debt securities of which have been admitted to trading on the Stock Exchange, to the Official List, to trading or official listing on an EEA Exchange or to trading or listing on an Approved Organisation; or

(iv) an authorised institution; or

(v) a European authorised institution.

(3) The acceptance of a deposit by a person (not being a body to which regulation 10(1) above applies) on terms involving the issue of shorter term or longer term debt securities is an exempt transaction if the requirements in paragraph (4) below and the applicable requirements in regulation 14 below are met.

(4) The requirements to be met under this paragraph are—

(a) the debt securities issued in relation to the acceptance of the deposit have been the subject of an application for admission to the Official List in respect of which listing particulars or a prospectus have been published as required under section 144(2A) or (2) of the Financial Services Act 1986(30), or have been admitted to the Official List, and the person accepting the deposit is a person of any description; or

(b) the debt securities issued in relation to the acceptance of the deposit have been the subject of an application for official listing on an EEA Exchange in respect of which listing particulars or a public offer prospectus have been published in accordance with Council Directive No. 80/390/EEC or Council Directive No. 89/298/EEC, or have been admitted to official listing on such an exchange, and the person accepting the deposit is a person of any description who has lodged with the Stock Exchange the relevant information in connection with those debt securities; or

(c) debt securities issued otherwise than in relation to the acceptance of the deposit, or shares, have been issued by the person accepting the deposit, being a company with adequate net assets, and admitted to the Official List; or

(d) debt securities issued otherwise than in relation to the acceptance of the deposit, or shares, have been issued by the person accepting the deposit, being a company with adequate net assets, and admitted to official listing on an EEA Exchange, and that person has lodged with the Stock Exchange the relevant information in connection with those shares or debt securities; or

(e) the debt securities issued in relation to the acceptance of the deposit—

(i) have been the subject of an application for admission to trading on the Stock Exchange in respect of which an offering document equivalent to listing particulars or a prospectus has been published as required by the rules of the Stock Exchange governing admission to trading or have been the subject of an application for admission to the Official List in respect of which listing particulars, a prospectus or an equivalent offering document have been published as required under section 144(2A) or (2) of the Financial Services Act 1986; or

(ii) have been admitted to trading on the Stock Exchange or to the Official List; or

(iii) have been the subject of an application for admission to trading on an EEA Exchange in respect of which an offering document equivalent to listing particulars or a public offer prospectus has been published in accordance with the relevant rules or have been the subject of an application for official listing on an EEA Exchange in respect of which listing particulars or a public offer prospectus have been published in accordance with Council Directive No. 80/390/EEC or Council Directive No. 89/298/EEC or in respect of which an equivalent offering document has been published in accordance with the relevant rules; or

(iv) have been admitted to trading or official listing on an EEA Exchange or to trading or listing on an Approved Organisation; and

the person accepting the deposit is the government of any country or territory, or a public authority, outside the United Kingdom; or

(f) debt securities issued otherwise than in relation to the acceptance of the deposit have been admitted to trading on the Stock Exchange or to the Official List, to trading or official listing on an EEA Exchange or to trading or listing on an Approved Organisation and the person accepting the deposit is the government of any country or territory, or a public authority, outside the United Kingdom; or

(g) the debt securities issued in relation to the acceptance of the deposit are the subject of a guarantee to the holder of the repayment of the principal and the payment of any interest or premium in connection therewith from any of the persons described in sub-paragraph (d) of paragraph (2) above who meets the criteria set out there.

(5) The references in this regulation to debt securities which have been the subject of an application for admission to trading on the Stock Exchange, to the Official List or to trading or official listing on an EEA Exchange relate to debt securities in respect of which the application for admission to trading or official listing has not been rejected or withdrawn.

(6) The references in this regulation to shares or debt securities admitted to trading on the Stock Exchange or to the Official List, to trading or official listing on an EEA Exchange or to trading or listing on an Approved Organisation relate—

(a) as to admission to trading, to debt securities which remain admitted to trading and are not the subject of a notice issued by the Stock Exchange, or, as the case may be, of official action taken in accordance with the rules of the EEA Exchange or the Approved Organisation cancelling or suspending the admission to trading or suspending dealings; or

(b) as to admission to listing or official listing, to shares or debt securities which remain listed and are not the subject of a notice issued by the Stock Exchange, or, as the case may be, of official action taken in accordance with the rules of the EEA Exchange or the Approved Organisation cancelling or suspending the listing or suspending dealings.

(7) For the purposes of this regulation a company has adequate net assets if its net assets were shown in its last audited individual or group accounts (as the case may be) to be not less than £25 million (or an amount of equivalent value denominated wholly or partly otherwise than in sterling).

(8) Where different issues of shares or debt securities of a company have been admitted to listing on an EEA Exchange, the obligations in paragraphs (2)(b) and (d)(ii) and (4)(d) and (g) above to lodge relevant information shall only apply to the information in connection with the shares or debt securities most recently admitted to listing, and where both shares and debt securities have been admitted to listing, such obligations shall only apply to the information in connection with the type of instrument most recently admitted to listing.

(9) Where more than one of the sub-paragraphs in paragraph (2) or (4) above applies in relation to the acceptance of a deposit involving the issue of relevant debt securities, the person accepting the deposit may choose which such sub-paragraph the debt securities are to be treated as falling within for the purpose of complying with the obligations in this regulation and in regulation 14 below.

(10) Where a recognised European document has been submitted to the competent authority for the purposes of Part IV of the Financial Services Act 1986 pursuant to an application for listing under section 143 of that Act in relation to shares or debt securities falling within paragraph (2)(b) or (4)(b) or (d) above or in relation to shares or debt securities issued by a company described in paragraph (2)(d)(ii) above and such document has been published as required under section 144(2A) or (2) of that Act, the requirements in those paragraphs and in paragraph (4)(g) above concerning the lodging of relevant information shall be treated as having been complied with in connection with such shares or debt securities in so far as they relate to listing particulars, a public offer prospectus, any relevant supplement or any other document required to be published as a condition of admission to official listing.

(11) In paragraph (4)(e)(iii) above “the relevant rules” has the meaning given in regulation 14(9)(b) below.

Requirements applying to relevant debt securities

14.—(1) Where a relevant debt security issued in relation to the acceptance of a deposit is intended to be an exempt transaction under regulation 13(1) or (3) above and in the latter case the requirements in regulation 13(4)(c), (d), (f) or (g) above apply, the relevant debt security shall meet the following requirements—

(a) a single debt security shall be issued in consideration of the acceptance of the deposit, in the form of commercial paper or, as the case may be, a shorter term debt security or a longer term debt security; and

(b) the redemption value of the relevant debt security shall be not less than £100,000 (or an amount of equivalent value denominated wholly or partly otherwise than in sterling); and

(c) the whole or part of the relevant debt security may be transferred only if the redemption value of each such debt security or of the part of it being transferred is not less than £100,000 (or an amount of equivalent value denominated wholly or partly otherwise than in sterling).

(2) The person accepting a deposit on terms involving the issue of a relevant debt security intended to be an exempt transaction under regulation 13(1) or (3) above shall make arrangements with the Stock Exchange for it to make available to the public all the relevant information lodged with it under regulation 13(2) or (4) above by such person and such arrangements shall be in force when any such deposit is accepted.

(3) Where the acceptance of a deposit intended to be an exempt transaction under regulation 13(3) above will involve the issue as part of a programme of shorter term or longer term debt securities falling within regulation 13(4)(b) above, all the relevant information required to be lodged with the Stock Exchange as provided in regulation 13(4)(b) above by the person accepting the deposit other than the pricing supplement or any other relevant information of a supplementary nature which has not yet become available shall be lodged before any such debt securities are offered for sale and the pricing supplement shall be lodged before the deposit is accepted.

(4) If any relevant information of a supplementary nature as described in paragraph (3) above other than a pricing supplement becomes available after debt securities falling within regulation 13(4)(b) above have been offered for sale but before a deposit is accepted, the offer for sale shall not be proceeded with until that information has been lodged with the Stock Exchange.

(5) Any selling document prepared in connection with the issue of a relevant debt security in relation to the acceptance of a deposit intended to be an exempt transaction under regulation 13(1) or (3) above and any instrument in writing evidencing the issue of a relevant debt security including a temporary document of title shall meet the following requirements—

(a) it shall bear a rubric describing the relevant debt security as “commercial paper issued in accordance with regulations made under section 4 of the Banking Act 1987”; “a shorter term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987”; or “a longer term debt security issued in accordance with regulations made under section 4 of the Banking Act 1987”, as the case may be; and

(b) it shall state the name of the issuer and that the issuer is not an authorised institution or a European authorised institution and shall either state that repayment of the principal and payment of any interest or premium in connection with the relevant debt security have not been guaranteed, or if they have been guaranteed, shall state that this is the case, the name of the guarantor and whether or not the guarantor is an authorised institution or a European authorised institution.

(6) Any selling document prepared in connection with the issue of shorter term or longer term debt securities not as part of a programme in relation to the acceptance of a deposit intended to be an exempt transaction under regulation 13(3) above where the debt securities will fall within regulation 13(4)(a) or (b) above shall include a statement made by the person accepting the deposit that he has complied with his obligations under the relevant rules in relation to the admission to listing of the debt securities or, where the debt securities have not yet been admitted to listing, will have complied with such obligations by the time when the debt securities are so admitted.

(7) Any selling document prepared in connection with the issue of shorter term or longer term debt securities as part of a programme in relation to the acceptance of a deposit intended to be an exempt transaction under regulation 13(3) above where the debt securities will fall within regulation 13(4)(a) or (b) above shall include a statement made by the person accepting the deposit that he—

(a) has complied with his obligations under the relevant rules in relation to the admission to and continuing listing of the programme and of any previous issues made under it and listed on the same exchange; and

(b) has complied with his obligations under the relevant rules in relation to the admission to listing of the debt securities falling within regulation 13(4)(a) or (b) above or, where the debt securities have not yet been admitted to listing, will have complied with such obligations by the time when the debt securities are so admitted; and

(c) has not, since the last publication, if any, in compliance with the relevant rules of information about the programme, any previous issues made under it and listed on the same exchange, or the debt securities falling within regulation 13(4)(a) or (b) above, having made all reasonable enquiries, become aware of any change in circumstances which could reasonably be regarded as significantly and adversely affecting his ability to meet his obligations as issuer in respect of the debt securities falling within regulation 13(4)(a) or (b) above as they fall due.

(8) Any selling document prepared in connection with the issue of shorter term or longer term debt securities in relation to the acceptance of a deposit intended to be an exempt transaction under regulation 13(3) above and falling within regulation 13(4)(b) above shall include a statement made by the person accepting the deposit that he has complied and will continue to comply with his obligations under these Regulations to lodge all relevant information in relation to the debt securities with the Stock Exchange.

(9) In paragraphs (6) and (7) above “the relevant rules” means—

(a) in the case of shorter term or longer term debt securities falling within regulation 13(4)(a) above, the listing rules, or

(b) in the case of shorter term or longer term debt securities falling within regulation 13(4)(b) above, the terms and conditions of entry to and the rules of the relevant EEA Exchange and the requirements of the relevant regulatory body in the EEA State where the listing is obtained.

(10) As provided in article 15 of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) (No. 2) Order 1995(31), the Stock Exchange is authorised by these Regulations to issue an investment advertisement when it makes available to the public as described in paragraph (2) above the relevant information lodged with it under regulation 13(2) or (4) above.

Authorised and exempted persons under the Financial Services Act 1986 and European investment firms

15.—(1) Subject to paragraphs (2) and (3) below, the acceptance of a deposit by a person who is an authorised person under the Financial Services Act 1986(32), a European investment firm carrying on home-regulated investment business in the United Kingdom or an exempted person under the Financial Services Act 1986 (in this regulation called “an authorised person”, “a European investment firm” and “an exempted person” respectively) is an exempt transaction if the deposit is accepted in the course of or for the purpose of engaging in any dealing activity with or on behalf of the person by whom or on whose behalf the deposit is made or any service activity on behalf of that person.

(2) Paragraph (1) above applies to an authorised person only if the activity is one in which he may engage without contravening any rules (made by the appropriate authority or a recognised organisation) of the kind described in section 48(2)(a) and (b) of the Financial Services Act 1986 (rules as to the type of business carried on or the persons in relation to whom business is carried on) or any prohibition of the kind described in section 65(33) of that Act.

(3) Paragraph (1) above applies to a European investment firm only if the activity is one in which it may engage without contravening any prohibition of the kind described in section 65 of the Financial Services Act 1986 or in regulations 9 and 10 of the Investment Services Regulations 1995.

(4) Paragraph (1) above applies to an exempted person only if the activity is one in respect of which he is exempt under the Financial Services Act 1986.

(5) In this regulation—

(a) “appropriate authority” means the Treasury(34) or a designated agency within the meaning of section 114(3) of the Financial Services Act 1986;

(b) “dealing activity” means an activity falling within paragraph 12 of Schedule 1 to that Act, construed without reference to Parts III and IV of that Schedule;

(c) “recognised organisation” means a body which is a recognised professional body or a recognised self-regulating organisation within the meaning of section 207(1) of that Act and references to rules made by a recognised organisation include rules (whether or not laid down by the organisation itself) which the organisation has power to enforce; and

(d) “service activity” means an activity falling within paragraph 13, 14 or 16 of Schedule 1 to that Act, construed without reference to Parts III and IV of that Schedule.

Revocation

16.  The Banking Act 1987 (Exempt Transactions) Regulations 1988(35), the Banking Act (Exempt Transactions) (Amendment) Regulations 1989(36), the Banking Act 1987 (Exempt Transactions) (Amendment) Regulations 1990(37), the Banking Act 1987 (Exempt Transactions) (Amendment No. 2) Regulations 1990(38), the Banking Act 1987 (Exempt Transactions) (Amendment No. 3) Regulations 1990(39), the Banking Act 1987 (Exempt Transactions) (Amendment) Regulations 1991(40) and the Banking Act 1987 (Exempt Transactions) (Amendment No. 2) Regulations 1991(41), are hereby revoked.

Roger Knapman

Patrick McLoughlin

Two of the Lords Commissioners of Her Majesty’s Treasury

13th March 1997