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The Uncertificated Securities Regulations 2001

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Regulation 5(1)

SCHEDULE 1U.K.REQUIREMENTS FOR APPROVAL OF A PERSON AS OPERATOR

Arrangements and resourcesU.K.

1.  An Operator must have adequate arrangements and resources for the effective monitoring and enforcement of compliance with his rules or, as respects monitoring, arrangements providing for that function to be performed on his behalf (and without affecting his responsibility) by another body or person who is able and willing to perform it.U.K.

Commencement Information

I1Sch. 1 para. 1 in force at 26.11.2001, see reg. 1

Financial resourcesU.K.

2.  An Operator must have financial resources sufficient for the proper performance of his functions as an Operator.U.K.

Commencement Information

I2Sch. 1 para. 2 in force at 26.11.2001, see reg. 1

Promotion and maintenance of standardsU.K.

3.  An Operator must be able and willing to promote and maintain high standards of integrity and fair dealing in the operation of the relevant system and to cooperate, by the sharing of information or otherwise, with the [F1Bank of England] and any other authority, body or person having responsibility for the supervision or regulation of investment business or other financial services.U.K.

Textual Amendments

Commencement Information

I3Sch. 1 para. 3 in force at 26.11.2001, see reg. 1

Operation of the relevant systemU.K.

4.—(1) Except in the circumstances referred to in subparagraph (2), where an Operator causes or permits a part of the relevant system which is not the Operator-system to be operated by another person (other than as his agent) the Operator—U.K.

(a)shall monitor compliance by the person and that part with the requirements of this Schedule; and

(b)shall have arrangements to ensure that the person provides him with such information and such assistance as he may require in order to meet his obligations under these Regulations.

(2) Where a part of the relevant system which is not the Operator-system comprises procedures which enable dematerialised instructions to be authenticated in accordance with paragraph 5(3)(b), the Operator shall have arrangements to ensure that he is provided with such information and such assistance as he may require in order to keep under review his agreement to the specifications by which those dematerialised instructions may be authenticated.

Commencement Information

I4Sch. 1 para. 4 in force at 26.11.2001, see reg. 1

System securityU.K.

5.—(1) A relevant system must be so constructed and operate in such a way that it satisfies the requirements of subparagraphs (2) to (6).U.K.

(2) The relevant system must minimise the possibility of unauthorised access to, or modification of, any program or data held in any computer forming part of the Operator-system.

(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—

(i)is identifiable as being from the computers of the Operator or of a particular system-participant; and

(ii)is designed to minimise fraud and forgery; 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; and

(ii)is designed to minimise fraud and forgery.

(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—

(a)

which is a recognised clearing house within section 285(1)(b) of the 2000 Act;

(b)

which is authorised under that Act to provide clearing services in the United Kingdom; F2...

(ba)

[F3which is an EEA central counterparty or a third country central counterparty within the meaning of section 285(1) of the 2000 Act; or]

(d)

which 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 body or association carrying on business outside the United Kingdom with whom an Operator has made arrangements—

(a)

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; or

(b)

to 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—

(a)

which is a recognised investment exchange within section 285(1)(a) of the 2000 Act;

(b)

which is authorised under that Act to provide a facility for the matching and execution of transactions in securities in the United Kingdom; or

(c)

which 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.

Textual Amendments

Commencement Information

I5Sch. 1 para. 5 in force at 26.11.2001, see reg. 1

System capabilitiesU.K.

6.  A relevant system must ensure that the Operator-system can send and respond to properly authenticated dematerialised instructions in sufficient volume and speed.U.K.

Commencement Information

I6Sch. 1 para. 6 in force at 26.11.2001, see reg. 1

7.  Before an Operator registers a transfer of title to uncertificated units of a security, a relevant system must be able to establish—U.K.

(a)that the transferor has title to such number of units of the security as is in aggregate at least equal to the number to be transferred; or

(b)that the transfer is one of two or more transfers which may be registered in accordance with regulation 30(2).

Commencement Information

I7Sch. 1 para. 7 in force at 26.11.2001, see reg. 1

8.  Before an Operator-instruction to a participating issuer to register a transfer of title to uncertificated units of a security is generated, a relevant system must be able to establish that the transferor has title to such number of units of the security as is in aggregate at least equal to the number to be transferred.U.K.

Commencement Information

I8Sch. 1 para. 8 in force at 26.11.2001, see reg. 1

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.U.K.

Commencement Information

I9Sch. 1 para. 9 in force at 26.11.2001, see reg. 1

10.  A relevant system must maintain adequate records of all dematerialised instructions.U.K.

Commencement Information

I10Sch. 1 para. 10 in force at 26.11.2001, see reg. 1

11.  A relevant system must—U.K.

(a)enable each system-member to obtain a copy of any records relating to him as are maintained by the relevant system in order to comply with paragraph 7(a), 8 or 10; and

(b)be able to make correcting entries in such records as are maintained in order to comply with paragraph 7(a) or 8 which are inaccurate.

Commencement Information

I11Sch. 1 para. 11 in force at 26.11.2001, see reg. 1

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 [F4(other than an Operator register of eligible debt securities)] relating to any participating security issued by him.U.K.

Textual Amendments

Commencement Information

I12Sch. 1 para. 12 in force at 26.11.2001, see reg. 1

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.U.K.

Commencement Information

I13Sch. 1 para. 13 in force at 26.11.2001, see reg. 1

14.  A relevant system must ensure that the Operator-system is able to generate Operator-instructions—U.K.

(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.

Commencement Information

I14Sch. 1 para. 14 in force at 26.11.2001, see reg. 1

15.  A relevant system must—U.K.

(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.

Commencement Information

I15Sch. 1 para. 15 in force at 26.11.2001, see reg. 1

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 1996(1)) a limit of such authority shall not be imposed or changed without the consent of the donee of that authority.U.K.

Commencement Information

I16Sch. 1 para. 16 in force at 26.11.2001, see reg. 1

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.U.K.

Commencement Information

I17Sch. 1 para. 17 in force at 26.11.2001, see reg. 1

18.  A relevant system must enable system-members—U.K.

(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.

Commencement Information

I18Sch. 1 para. 18 in force at 26.11.2001, see reg. 1

19.  Paragraph 18 shall not apply to any wholly dematerialised security.U.K.

Commencement Information

I19Sch. 1 para. 19 in force at 26.11.2001, see reg. 1

Operating proceduresU.K.

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.U.K.

Commencement Information

I20Sch. 1 para. 20 in force at 26.11.2001, see reg. 1

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—U.K.

(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).

Commencement Information

I21Sch. 1 para. 21 in force at 26.11.2001, see reg. 1

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—U.K.

(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.

Commencement Information

I22Sch. 1 para. 22 in force at 26.11.2001, see reg. 1

23.  A relevant system must comprise procedures which ensure that, where participating issuers keep records of securities, those records are regularly reconciled with the relevant Operator registers of securities.U.K.

Commencement Information

I23Sch. 1 para. 23 in force at 26.11.2001, see reg. 1

24.  A relevant system must comprise procedures which—U.K.

(a)enable system-users to notify the Operator of an error in or relating to a dematerialised instruction; and

(b)ensure that, where the Operator becomes aware of an error in or relating to a dematerialised instruction, he takes appropriate corrective action.

Commencement Information

I24Sch. 1 para. 24 in force at 26.11.2001, see reg. 1

Rules and practicesU.K.

25.  An Operator’s rules and practices—U.K.

(a)must bind system-members and participating issuers—

(i)so as to ensure the efficient processing of transfers of title to uncertificated units of a security in response to Operator-instructions; and

(ii)as to the action to be taken where transfer of title in response to a system-member instruction or an Operator-instruction cannot be effected;

(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)must make provision for the orderly termination of participation by system-members and system-participants whose participation is disruptive to other system-members or system-participants or to participating issuers;

(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 [F5(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).

Textual Amendments

Commencement Information

I25Sch. 1 para. 25 in force at 26.11.2001, see reg. 1

26.  An Operator’s rules and practices must require—U.K.

(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.

Commencement Information

I26Sch. 1 para. 26 in force at 26.11.2001, see reg. 1

27.  An Operator must have rules which require system-users and former system-users to provide him with such information in their possession as he may require in order to meet his obligations under these Regulations.U.K.

Commencement Information

I27Sch. 1 para. 27 in force at 26.11.2001, see reg. 1

[F6Access to central counterparty, clearing and settlement facilitiesU.K.

Textual Amendments

28.—(1) The Operator must make transparent and non-discriminatory rules, based on objective criteria, governing access to his settlement facilities.U.K.

(2) The rules under sub-paragraph (1) must enable an investment firm or a credit institution authorised by the competent authority of another EEA State (including a branch established in the United Kingdom of such a firm or institution) to have access to those facilities on the same terms as a UK firm for the purposes of finalising or arranging the finalisation of transactions in financial instruments.

(3) The Operator may refuse access to those facilities on legitimate commercial grounds.

(4) In this paragraph—

F7...

“branch” in relation to an investment firm has the meaning given in Article 4.1.26 of the markets in financial instruments directive and in relation to a credit institution has the meaning given in [F8Article 4(1)(17) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012];

“competent authority”, in relation to an investment firm or credit institution, means the competent authority in relation to that firm or institution for the purposes of the markets in financial instruments directive;

“credit institution” means—

(a)

a credit institution authorised under [F9Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 relating to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC], or

(b)

an institution which would satisfy the requirements for authorisation as a credit institution under that directive if it had its registered office (or if it does not have a registered office, its head office) in an EEA State;

“EEA State” has the meaning given by paragraph 8 of Schedule 3 to the 2000 Act;

“financial instrument” has the meaning given by Article 4.1.17 of the markets in financial instruments directive;

“investment firm” has the meaning given by section 424A of the 2000 Act;

“markets in financial instruments directive” means Directive 2004/39/EC of the European Parliament and of the Council of 21st April 2004 on markets in financial instruments;

“regulated activity” has the meaning given by section 22 of the 2000 Act;

“settlement” has the same meaning as in the markets in financial instruments directive;

[F10“UK firm” means an investment firm or credit institution which has a permission given (or having effect as if given) by the Financial Conduct Authority or the Prudential Regulation Authority under Part 4A of the 2000 Act to carry on one or more regulated activities.]]

Textual Amendments

Regulation 13

[F11SCHEDULE 2U.K.PREVENTION OF EXCESSIVE REGULATORY PROVISION

Textual Amendments

Refusal of approval on ground of excessive regulatory provisionU.K.

1.—(1) The Bank of England must not approve a person as an Operator of a relevant system if it appears to it that a proposed regulatory provision of that person in connection with the relevant system will impose an excessive requirement on the persons affected (directly or indirectly) by it.U.K.

(2) Expressions used in sub-paragraph (1) that are defined for the purposes of paragraph 2 (power of the Bank of England to disallow excessive regulatory provision) have the same meaning as in that paragraph.

Power of the Bank of England to disallow excessive regulatory provisionU.K.

2.—(1) This paragraph applies where an Operator proposes to make any regulatory provision in connection with its business as an Operator of a relevant system.U.K.

(2) If it appears to the Bank of England—

(a)that the proposed provision will impose a requirement on persons affected (directly or indirectly) by it, and

(b)that the requirement is excessive,

the Bank of England may direct that the proposed provision must not be made.

(3) A requirement is excessive if—

(a)it is not required under EU law or any enactment or rule of law in the United Kingdom, and

(b)either—

(i)it is not justified as pursuing a reasonable regulatory objective, or

(ii)it is disproportionate to the regulatory objective to be achieved.

(4) In considering whether a requirement is excessive the Authority must have regard to all the relevant circumstances including—

(a)the effect of existing legal and other requirements,

(b)the global character of financial services,

(c)the desirability of fostering innovation, and

(b)the impact of the proposed provision on market confidence.

(5) In this paragraph “requirement” includes any obligation or burden.

(6) Any provision made in contravention of a direction under this paragraph is of no effect.

Duty to notify proposal to make regulatory provisionU.K.

3.—(1) An Operator that proposes to make any regulatory provision must give written notice of the proposal to the Bank of England without delay.U.K.

(2) The Bank of England may by rules—

(a)specify descriptions of regulatory provision in relation to which, or circumstances in which, the duty in sub-paragraph (1) does not apply, or

(b)provide that the duty applies only to such descriptions of regulatory provision or in such circumstances as the rules specify.

(3) The Bank of England may also by rules—

(a)make provision as to the form and contents of the notice required, and

(b)require the Operator to provide such information relating to the proposal as may be specified in the rules or as the Bank of England may reasonably require.

Restriction on making provision before the Bank of England decides whether to actU.K.

4.—(1) Where notice of a proposal to make regulatory provision is required under paragraph 3, the provision must not be made—U.K.

(a)before that notice is given, or

(b)subject to sub-paragraph (4)(a), before the end of the initial period.

(2) The initial period is—

(a)the period of 30 days beginning with the day upon which the Bank of England receives notice of the proposal, or

(b)if any consultation period announced by the Operator in relation to the proposal ends after that 30-day period, the end of the consultation period.

(3) If, before the end of the initial period the Bank of England notifies the Operator that it is calling in the proposal, the provisions of paragraph 5 (consideration by the Bank of England whether to disallow proposed provision) apply as to when the provision may be made.

(4) If—

(a)before the end of the initial period the Bank of England notifies the Operator that it is not calling in the proposal, or

(b)the initial period ends without the Bank of England having notified the Operator that it is calling in the proposal,

the Operator may then make the proposed provision.

(5) Any provision made in contravention of this paragraph is of no effect.

Consideration by the Bank of England whether to disallow proposed provisionU.K.

5.—(1) This paragraph applies where the Bank of England notifies an Operator that it is calling in a proposal to make regulatory provision.U.K.

(2) The Bank of England must publish a notice—

(a)giving details of the proposed provision,

(b)stating that it has called in the proposal in order to consider whether to disallow it, and

(c)specifying a period during which representations with respect to that question may be made to it.

(3) The Bank of England may extend the period for making representations.

(4) The Bank of England must notify the Operator of its decision whether to disallow the provision not later than 30 days after the end of the period for making representations, and must publish the decision and the reasons for it.

(5) The Operator must not make the provision unless and until—

(a)the Bank of England notifies the Operator of its decision not to disallow the provision, or

(b)the 30-day period specified in sub-paragraph (4) ends without the Bank of England having notified the Operator of any decision.

(6) If the Bank of England notifies the Operator of its decision to disallow the provision and that decision is questioned in legal proceedings—

(a)the Operator must not make the provision until those proceedings, and any proceedings on appeal, are finally determined,

(b)if the Bank of England’s decision is quashed and the matter is remitted to it for reconsideration, the court may give directions as to the period within which the Bank of England is to complete its reconsideration, and

(c)the Operator must not make the provision until—

(i)the Bank of England notifies it of its decision on reconsideration not to disallow the provision, or

(ii)the period specified by the court ends without the Bank of England having notified any decision.

(7) Any provision made in contravention of sub-paragraph (5) or (6) is of no effect.

Power to disallow excessive regulatory provision: supplementaryU.K.

6.—(1) In paragraphs 2 to 5 —U.K.

(a)“regulatory provision” means any rule, arrangements, guidance, policy or practice, and

(b)references to making provision shall be read accordingly as including, as the case may require, making rules, issuing guidance, entering into arrangements or adopting a policy or practice.

(2) For the purposes of those paragraphs a variation of a proposal is treated as new proposal.]

Regulations 5(4), 7(3) and 8(4)

SCHEDULE 3U.K.PROCEDURE FOR REFUSAL OR WITHDRAWAL OF APPROVAL AS AN OPERATOR, OR FOR GIVING DIRECTIONS, ETC.

[F121.  Before—U.K.

(a)refusing an application for approval as an Operator made under regulation 4 (whether or not pursuant to paragraph 1(1) of Schedule 2);

(b)withdrawing an Operator’s approval under regulation 7(2); or

(c)giving a direction under regulation 8,

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

Textual Amendments

Commencement Information

I28Sch. 3 para. 1 in force at 26.11.2001, see reg. 1

2.  A notice under paragraph 1 shall—U.K.

[F13(a)state why the Bank of England intends to refuse the application, withdraw the approval or give the direction; and]

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

Textual Amendments

Commencement Information

I29Sch. 3 para. 2 in force at 26.11.2001, see reg. 1

[F143.  Before the end of the period for making representations, the Operator may make representations to the Bank of England.]U.K.

Textual Amendments

Commencement Information

I30Sch. 3 para. 3 in force at 26.11.2001, see reg. 1

[F154.  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).]U.K.

Textual Amendments

Commencement Information

I31Sch. 3 para. 4 in force at 26.11.2001, see reg. 1

5.  In deciding whether to refuse the application, withdraw the approval, [F16or] give the directionF17... the [F18Bank of England must] have regard to any representations made in accordance with paragraph 3.U.K.

Textual Amendments

Commencement Information

I32Sch. 3 para. 5 in force at 26.11.2001, see reg. 1

[F196.—(1) When the Bank of England has decided whether to—U.K.

(a)refuse the application;

(b)withdraw the approval; or

(c)give the direction;

it must give the Operator written notice of its decision.]

Textual Amendments

Commencement Information

I33Sch. 3 para. 6 in force at 26.11.2001, see reg. 1

7.  If the [F20Bank of England reasonably considers it necessary] to do so, [F21it] may withdraw an Operator’s approval under regulation 7(2) or give a direction under regulation 8—U.K.

(a)without following the procedure set out in this Schedule; or

(b)if the [F22Bank of England has] begun to follow that procedure, regardless of whether the period for making representations has expired.

Textual Amendments

Commencement Information

I34Sch. 3 para. 7 in force at 26.11.2001, see reg. 1

[F238.  If the Bank of England has, in relation to a particular matter, followed the procedure set out in paragraphs 1 to 5, it need not follow it again if, in relation to that matter, it decides to take action other than that specified in its notice under paragraph 1.]U.K.

Textual Amendments

Commencement Information

I35Sch. 3 para. 8 in force at 26.11.2001, see reg. 1

Regulation 23(4)

SCHEDULE 4U.K.KEEPING OF REGISTERS AND RECORDS OF PARTICIPATING SECURITIES

InterpretationU.K.

1.  In this Schedule—U.K.

“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.

Commencement Information

I36Sch. 4 para. 1 in force at 26.11.2001, see reg. 1

Registers of MembersU.K.

2.—(1) Every participating issuer which is a company shall enter in its issuer register of members—U.K.

(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), [F24section 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) [F25Section 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 [F25section 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 [F2610 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.

Textual Amendments

Commencement Information

I37Sch. 4 para. 2 in force at 26.11.2001, see reg. 1

3.  [F27Section 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.

Textual Amendments

Commencement Information

I38Sch. 4 para. 3 in force at 26.11.2001, see reg. 1

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—U.K.

(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 [F2810 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.

Textual Amendments

Commencement Information

I39Sch. 4 para. 4 in force at 26.11.2001, see reg. 1

Records of uncertificated sharesU.K.

5.—(1) Every participating issuer which is a company shall enter in its record of uncertificated shares—U.K.

(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) [F29Section 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 [F29section 113] of that Act.

Textual Amendments

Commencement Information

I40Sch. 4 para. 5 in force at 26.11.2001, see reg. 1

Location of issuer register of members and records of uncertificated shares, and ancillary mattersU.K.

6.—(1) Subject to subparagraph (2), a company’s issuer register of members and its record of uncertificated shares shall be [F30kept available for inspection] at its registered office [F31or at a place specified in regulations made under section 1136 of the 2006 Act] U.K.

F32(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F32(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

but the issuer register of members must not be [F30kept 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 [F30kept available for inspection] at the same place.

(3) Subject as follows, every participating issuer which is a company shall send notice F33... to the registrar of companies of the place where its issuer register of members and its record of uncertificated shares are [F30kept available for inspection], and of any change in that place, provided that any notice sent by such a company in accordance with [F34section 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 [F30kept available for inspection] at the company’s registered office.

(5) Subject to subparagraph (6), [F35section 114 of the 2006 Act] shall not apply to a company which is a participating issuer.

(6) [F36Section 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 [F36section 114(2)] of that Act.

Textual Amendments

Commencement Information

I41Sch. 4 para. 6 in force at 26.11.2001, see reg. 1

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.U.K.

(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 [F37kept available for inspection] at the same place as the issuer register of members and the record of uncertificated shares.

(4) Subject to subparagraph (5), [F38section 115 of the 2006 Act] shall not apply to a company which is a participating issuer.

(5) [F39Section 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 [F39section 115] of that Act.

Textual Amendments

Commencement Information

I42Sch. 4 para. 7 in force at 26.11.2001, see reg. 1

8.  [F40Section 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.

Textual Amendments

Commencement Information

I43Sch. 4 para. 8 in force at 26.11.2001, see reg. 1

9.  [F41Sections 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 [F42section 116] to the company’s [F43index of members’ names] were references to the index required to be kept by paragraph 7,

and references to [F44the 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.

Textual Amendments

Commencement Information

I44Sch. 4 para. 9 in force at 26.11.2001, see reg. 1

10.  Where under [F45paragraph 6(1)], a company’s issuer register of members and record of uncertificated shares is [F46kept 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—U.K.

  • paragraph 6(2) (record of uncertificated shares to be [F46kept available for inspection] with issuer register of members);

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

  • paragraph 7(3) (index to be [F46kept available for inspection] with issuer register of members and record of uncertificated shares); or

  • [F47section 116 of the 2006 Act (rights to inspect and require copies)],

or with any requirement of [F48the 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 [F49section 118(3) of the 2006 Act] extends to the making of orders against that other and his officers and servants.

Textual Amendments

Commencement Information

I45Sch. 4 para. 10 in force at 26.11.2001, see reg. 1

11.  Where, under [F50section 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.U.K.

Textual Amendments

Commencement Information

I46Sch. 4 para. 11 in force at 26.11.2001, see reg. 1

Registers of [F51general] public sector securitiesU.K.

Textual Amendments

12.—(1) Where an Operator of a relevant system is required to maintain an Operator register of [F52general] public sector securities, that register shall comprise the following particulars which the Operator shall enter on it, namely—U.K.

(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.

[F53(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 [F54general] local authority securities held in uncertificated form—

  • regulations 5 and 6;

  • regulations 8 to 14;

  • regulation 16; and

  • regulation 21.

Textual Amendments

Commencement Information

I47Sch. 4 para. 12 in force at 26.11.2001, see reg. 1

Records of uncertificated [F55general] public sector securitiesU.K.

Textual Amendments

13.—(1) The participating issuer shall enter in a record of uncertificated [F56general] 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 [F56general] public sector securities.U.K.

(2) In respect of every participating security which is a [F57general] UK Government security, the record of uncertificated [F56general] public sector securities shall be kept [F58by 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 [F56general] public sector securities is regularly reconciled with the Operator register of [F56general] public sector securities.

(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 [F56general] public sector securities which he is required to keep by these Regulations accord with the particulars entered in the Operator register of [F56general] public sector securities to which the record relates.

(5) The provisions of the Bankers' Books Evidence Act 1879(2) shall apply for the purpose of proving any entry in the record of uncertificated [F56general] 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.

Textual Amendments

Commencement Information

I48Sch. 4 para. 13 in force at 26.11.2001, see reg. 1

Registers of corporate securitiesU.K.

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—U.K.

(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) [F59Sections 743 to 748 of the 2006 Act] shall not apply to any part of an Operator register of corporate securities.

Textual Amendments

Commencement Information

I49Sch. 4 para. 14 in force at 26.11.2001, see reg. 1

Records of uncertificated corporate securitiesU.K.

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.U.K.

(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) [F60Sections 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, [F61as they apply] or would apply to any register of debenture holders maintained by the company; and references to [F62the 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.

Textual Amendments

Commencement Information

I50Sch. 4 para. 15 in force at 26.11.2001, see reg. 1

MiscellaneousU.K.

16.—F63(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

(2) [F64Every register which an Operator is required to maintain by virtue of these Regulations] [F65(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.

Textual Amendments

Commencement Information

I51Sch. 4 para. 16 in force at 26.11.2001, see reg. 1

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.U.K.

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

Commencement Information

I52Sch. 4 para. 17 in force at 26.11.2001, see reg. 1

18.  [F66Sections 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.

Textual Amendments

Commencement Information

I53Sch. 4 para. 18 in force at 26.11.2001, see reg. 1

19.—(1) Such sanctions as apply to a company and its officers in the event of a default in complying with [F67section 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.U.K.

(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 [F68falling within paragraph (a)(i) of the definition of “local authority security].

F69(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;

[F70(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.]

Textual Amendments

Commencement Information

I54Sch. 4 para. 19 in force at 26.11.2001, see reg. 1

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 [F71section 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.U.K.

Textual Amendments

Commencement Information

I55Sch. 4 para. 20 in force at 26.11.2001, see reg. 1

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 [F72section 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.U.K.

Textual Amendments

Commencement Information

I56Sch. 4 para. 21 in force at 26.11.2001, see reg. 1

Regulation 49(5)

F73SCHEDULE 5U.K.ADAPTATIONS IN RESPECT OF NORTHERN IRELAND

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

Textual Amendments

Regulation 50

SCHEDULE 6U.K.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.U.K.

Commencement Information

I57Sch. 6 para. 1 in force at 26.11.2001, see reg. 1

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”.U.K.

Commencement Information

I58Sch. 6 para. 2 in force at 26.11.2001, see reg. 1

3.  Regulation 5 shall be modified by the substitution for paragraph (4) of—U.K.

“(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.”.

Commencement Information

I59Sch. 6 para. 3 in force at 26.11.2001, see reg. 1

4.  Regulation 7 shall be modified by—U.K.

(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.”

Commencement Information

I60Sch. 6 para. 4 in force at 26.11.2001, see reg. 1

5.  Regulation 8 shall be modified by—U.K.

(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).

Commencement Information

I61Sch. 6 para. 5 in force at 26.11.2001, see reg. 1

6.  In regulation 9—U.K.

(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).

Commencement Information

I62Sch. 6 para. 6 in force at 26.11.2001, see reg. 1

7.  Regulation 11(1) shall be modified to read—U.K.

“(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”.”.

Commencement Information

I63Sch. 6 para. 7 in force at 26.11.2001, see reg. 1

8.  In paragraph 5(7) of Schedule 1—U.K.

(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”.

Commencement Information

I64Sch. 6 para. 8 in force at 26.11.2001, see reg. 1

9.  Schedule 2 shall be modified by—U.K.

(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.”.

Commencement Information

I65Sch. 6 para. 9 in force at 26.11.2001, see reg. 1

Regulation 51

SCHEDULE 7U.K.MINOR AND CONSEQUENTIAL AMENDMENTS

Part 1U.K.Primary Legislation

The National Debt Act 1870U.K.

1.  In section 3 of the National Debt Act 1870(3), for the definition of “Stockholder” there shall be substituted—U.K.

““Stockholder” means a person holding stock, being entered as such in—

(a)

a register kept by the Bank of England or the Bank of Ireland under regulation 1 of the Government Stock Regulations 1965; or

(b)

a 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):”.

Commencement Information

I66Sch. 7 para. 1 in force at 26.11.2001, see reg. 1

The National Debt (Stockholders Relief) Act 1892U.K.

2.  In subsection (1) of section 2 of the National Debt (Stockholders Relief) Act 1892(4), for the word “inscribed” there shall be substituted “entered in a relevant register”.U.K.

Commencement Information

I67Sch. 7 para. 2 in force at 26.11.2001, see reg. 1

The Finance (No. 2) Act 1915U.K.

3.  In section 48 of the Finance (No. 2) Act 1915(5)—U.K.

(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”.

Commencement Information

I68Sch. 7 para. 3 in force at 26.11.2001, see reg. 1

The Finance Act 1916U.K.

4.  In section 67 of the Finance Act 1916(6)—U.K.

(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”.

Commencement Information

I69Sch. 7 para. 4 in force at 26.11.2001, see reg. 1

The Finance Act 1949U.K.

5.  In section 48 of the Finance Act 1949(7)—U.K.

(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.”.

Commencement Information

I70Sch. 7 para. 5 in force at 26.11.2001, see reg. 1

The Finance (No. 2) Act 1975U.K.

6.  In section 73 of the Finance (No. 2) Act 1975(8)—U.K.

(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.”.

Commencement Information

I71Sch. 7 para. 6 in force at 26.11.2001, see reg. 1

The Companies Act 1985U.K.

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).”.U.K.

Commencement Information

I72Sch. 7 para. 7 in force at 26.11.2001, see reg. 1

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.”.U.K.

Commencement Information

I73Sch. 7 para. 8 in force at 26.11.2001, see reg. 1

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

Commencement Information

I74Sch. 7 para. 9 in force at 26.11.2001, see reg. 1

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

“(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).”.

Commencement Information

I75Sch. 7 para. 10 in force at 26.11.2001, see reg. 1

The Financial Services Act 1986U.K.

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

“(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;”.

Commencement Information

I76Sch. 7 para. 11 in force at 26.11.2001, see reg. 1

12.  In the 1986 Act, in—U.K.

(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”.

Commencement Information

I77Sch. 7 para. 12 in force at 26.11.2001, see reg. 1

The Banking Act 1987U.K.

13.  In the Banking Act 1987(9), in—U.K.

(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”.

Commencement Information

I78Sch. 7 para. 13 in force at 26.11.2001, see reg. 1

Part 2U.K.Subordinate Legislation

The Government Stock Regulations 1965U.K.

14.  In the 1965 Regulations—U.K.

(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 4(10)—

(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”.

Commencement Information

I79Sch. 7 para. 14 in force at 26.11.2001, see reg. 1

The Local Authority (Stocks and Bonds) Regulations 1974U.K.

15.  In the 1974 Regulations—U.K.

(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.

Commencement Information

I80Sch. 7 para. 15 in force at 26.11.2001, see reg. 1

The Exchange of Securities (General) Rules 1979U.K.

16.  In the Exchange of Securities (General) Rules 1979(11)—U.K.

(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.”.

Commencement Information

I81Sch. 7 para. 16 in force at 26.11.2001, see reg. 1

The Companies (Registers and other Records) Regulations 1985U.K.

17.  In the Companies (Registers and other Records) Regulations 1985(12)—U.K.

(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.”.

Commencement Information

I82Sch. 7 para. 17 in force at 26.11.2001, see reg. 1

The Stamp Duty Reserve Tax Regulations 1986U.K.

18.  In the Stamp Duty Reserve Tax Regulations 1986(13), in the definition of “the Treasury Regulations” in regulation 2, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.U.K.

Commencement Information

I83Sch. 7 para. 18 in force at 26.11.2001, see reg. 1

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

19.  In the Companies (Registers and other Records) Regulations (Northern Ireland) 1986 (14)—U.K.

(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.”.

Commencement Information

I84Sch. 7 para. 19 in force at 26.11.2001, see reg. 1

The Financial Markets and Insolvency Regulations 1996U.K.

20.  In the Financial Markets and Insolvency Regulations 1996(15)—U.K.

(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”.

Commencement Information

I85Sch. 7 para. 20 in force at 26.11.2001, see reg. 1

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

21.  In the Stock Transfer (Addition and Substitution of Forms) Order 1996(16), in paragraph (2) of article 1, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.U.K.

Commencement Information

I86Sch. 7 para. 21 in force at 26.11.2001, see reg. 1

The Financial Services Act 1986 (Exemption) Order 1996U.K.

22.  In the Financial Services Act 1986 (Exemption) Order 1996(17), 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”.U.K.

Commencement Information

I87Sch. 7 para. 22 in force at 26.11.2001, see reg. 1

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

23.  In the Stamp Duty Reserve Tax (UK Depository Interests in Foreign Securities) Regulations 1999(18), in the definition of “foreign securities” in regulation 2, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.U.K.

Commencement Information

I88Sch. 7 para. 23 in force at 26.11.2001, see reg. 1

The Open-Ended Investment Companies Regulations 2001U.K.

24.  In the Open-Ended Investment Companies Regulations 2001—U.K.

(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.

Commencement Information

I89Sch. 7 para. 24 in force at 26.11.2001, see reg. 1

(1)

S.I. 1996/1469.

(2)

42 & 43 Vict c. 11.

(4)

1892 c. 39; section 2 was substituted by section 108(1) of the Finance Act 1997 (c. 16).

(5)

1915 c. 89; the relevant amendment to section 48 was made by section 108(1) of the Post Office Act 1969 (c. 48).

(6)

1916 c. 24; section 67 was amended by section 108(1) of the Post Office Act 1969.

(9)

1987 c. 22; relevant amending instrument is S.I. 1996/1669.

(10)

Paragraph (1) of regulation 4 was numbered as such by article 2 of S.I. 1981/1004 and amended by regulation 4 of S.I. 1985/1146 and regulation 2 of S.I. 2000/1681; paragraphs (2) to (4) of regulation 4 were inserted by article 2 of S.I. 1981/1004, regulation 4 of S.I. 1985/1146 and regulation 4 of S.I. 1997/1709 respectively.

(11)

S.I. 1979/1678; relevant amending instruments are S.I. 1985/1147; S.I. 1998/2505; S.I. 1999/1207 and S.I. 2000/1516.

(12)

S.I. 1985/724.

(13)

S.I. 1986/1711; relevant amending instrument is S.I. 1997/2430.

(15)

S.I. 1996/1469.

(16)

S.I. 1996/1571.

(17)

S.I. 1996/1587.

(18)

S.I. 1999/2383.

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