SCHEDULE 1F63Requirements for operation of a relevant system
Arrangements and resources
F641
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial resources
F642
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Promotion and maintenance of standards
F643
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operation of the relevant system
F644
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
System security
I15
F691
A relevant system must satisfy the requirements of sub-paragraphs (3) to (6).
F702
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Each dematerialised instruction must be authenticated—
F71a
in accordance with the specifications of the Operator, and those specifications shall provide that each dematerialised instruction is identifiable as being from the computers of the Operator or of a particular system-participant; 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; F72...
F72ii
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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; F54...
- ba
F55which is F91... 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;
- a
“depositary” means F73F92a CSD or third-country CSD within the meaning of the CSD regulation as amended from time to time or 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
- a
“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.
- a
System capabilities
F656
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F657
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F658
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I29
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.
F7410
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F75 11
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I312
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 F1(other than an Operator register of eligible debt securities) relating to any participating security issued by him.
I413
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.
I514
A relevant system must ensure that the Operator-system is able to generate Operator-instructions—
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.
I615
A relevant system must—
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.
I716
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 199621) a limit of such authority shall not be imposed or changed without the consent of the donee of that authority.
I817
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.
I918
A relevant system must enable system-members—
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.
I1019
Paragraph 18 shall not apply to any wholly dematerialised security.
Operating procedures
I1120
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.
I1221
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—
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).
I1322
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—
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.
F7623
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F7724
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rules and practices
I1425
An Operator’s rules and practices—
F78a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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;
F79d
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 F2(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).
I1526
An Operator’s rules and practices must require—
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.
F8027
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F15Access to central counterparty, clearing and settlement facilities
Sch. 1 para. 28 inserted (1.11.2007) by The Uncertificated Securities (Amendment) Regulations 2007 (S.I. 2007/124), regs. 1, 3
F8128
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F66SCHEDULE 2PREVENTION OF EXCESSIVE REGULATORY PROVISION
Sch. 2 omitted (27.3.2019) by virtue of The Uncertificated Securities (Amendment and EU Exit) Regulations 2019 (S.I. 2019/679), regs. 1(2), 4(10) (with regs. 10-12)
F66Refusal of approval on ground of excessive regulatory provision
F661
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F66Power of the Bank of England to disallow excessive regulatory provision
F662
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F66Duty to notify proposal to make regulatory provision
F663
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F66Restriction on making provision before the Bank of England decides whether to act
F664
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F66Consideration by the Bank of England whether to disallow proposed provision
F665
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F66Power to disallow excessive regulatory provision: supplementary
F666
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 3F67Procedure for giving directions
Sch. 3 heading substituted (27.3.2019) by The Uncertificated Securities (Amendment and EU Exit) Regulations 2019 (S.I. 2019/679), regs. 1(2), 4(11)(a) (with regs. 10-12)
I16F561
Before—
F82a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F83b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
giving a direction under regulation 8,
the Bank of England must give written notice of its intention to do so to the Operator.
I172
A notice under paragraph 1 shall—
b
draw attention to the right to make representations conferred by paragraph 3.
I18F583
Before the end of the period for making representations, the Operator may make representations to the Bank of England.
I19F594
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).
I205
I21F626
1
When the Bank of England has decided whether to—
F86a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F87b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
give the direction;
it must give the Operator written notice of its decision F88and the reasons for its decision.
F897
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F908
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F689
If the Bank of England decides to give the direction, the Operator may refer the matter to the Upper Tribunal.
F6810
Part 9 of the 2000 Act (hearings and appeals) applies to a reference to the Upper Tribunal under paragraph 9 as it applies to a reference to the Upper Tribunal under the 2000 Act, with the following modifications—
a
a reference is a “disciplinary reference” for the purposes of section 133 of the 2000 Act if it is in respect of a decision to give a direction under this Schedule;
b
section 133(1)(a) and (c) of the 2000 Act does not apply.
SCHEDULE 4KEEPING OF REGISTERS AND RECORDS OF PARTICIPATING SECURITIES
Interpretation
I221
In this Schedule—
“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.
Registers of Members
I232
1
Every participating issuer which is a company shall enter in its issuer register of members—
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), F17section 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
6
An entry relating to a former member of the company may be removed from the issuer register of members after the expiration of F1910 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.
I243
F20Section 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.
I254
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—
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 F2110 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.
Registers of F6general public sector securities
Word in Sch. 4 para. 12 cross-heading inserted (24.6.2003) by The Uncertificated Securities (Amendment) (Eligible Debt Securities) Regulations 2003 (S.I. 2003/1633), regs. 1(1), 6(5)(a)
I3312
1
Where an Operator of a relevant system is required to maintain an Operator register of F5general public sector securities, that register shall comprise the following particulars which the Operator shall enter on it, namely—
a
the names and addresses of the persons holding units of the relevant participating security in uncertificated form; and
b
how many units of that security each such person holds in that form.
F112
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 F4general local authority securities held in uncertificated form—
regulations 5 and 6;
regulations 8 to 14;
regulation 16; and
regulation 21.
Records of uncertificated F8general public sector securities
Word in Sch. 4 para. 13 cross-heading inserted (24.6.2003) by The Uncertificated Securities (Amendment) (Eligible Debt Securities) Regulations 2003 (S.I. 2003/1633), regs. 1(1), 6(5)(c)
I3413
1
2
3
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 F7general public sector securities which he is required to keep by these Regulations accord with the particulars entered in the Operator register of F7general public sector securities to which the record relates.
5
The provisions of the Bankers' Books Evidence Act 187926 shall apply for the purpose of proving any entry in the record of uncertificated F7general public sector securities as if the participating issuer were a bank and a banker within the meaning of that Act, and as if such entry in the record, or, where the information recorded therein is not in readable form and is later transcribed into readable form, the transcribed version of such entry, were an entry in a banker’s book.
Registers of corporate securities
I3514
1
Where an Operator of a relevant system is required to maintain an Operator register of corporate securities, that register shall comprise the following particulars which the Operator shall enter on it, namely—
a
the names and addresses of the persons holding units of the relevant participating security in uncertificated form; and
b
how many units of that security each such person holds in that form.
2
F44Sections 743 to 748 of the 2006 Act shall not apply to any part of an Operator register of corporate securities.
Records of uncertificated corporate securities
I3615
1
A participating issuer shall enter in a record of uncertificated corporate securities the same particulars, so far as practicable, as are required by paragraph 14(1) to be entered in the relevant Operator register of corporate securities.
2
A participating issuer to which this paragraph applies shall, unless it is impracticable to do so by virtue of circumstances beyond its control, ensure that the record of uncertificated corporate securities is regularly reconciled with the Operator register of corporate securities.
3
Provided that it has complied with subparagraph (2), a participating issuer shall not be liable in respect of any act or thing done or omitted to be done by it or on its behalf in reliance upon the assumption that the particulars entered in any record of uncertificated corporate securities which the participating issuer is required to keep by these Regulations accord with the particulars entered in any Operator register of corporate securities relating to it.
4
In the case of a participating issuer which is a company, the record of uncertificated corporate securities shall be kept at the same place as the part of any register of debenture holders maintained by the company would be required to be kept.
5
F45Sections 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, F46as they apply or would apply to any register of debenture holders maintained by the company; and references to F47the 2006 Act in the Companies (Fees for Inspection and Copying of Company Records) Regulations 2007 and the Companies (Fees for Inspection and Copying of Company Records) Regulations 2008 shall be construed accordingly.
6
Any provision of an enactment or instrument which requires a register of persons holding securities (other than shares or public sector securities) to be open to inspection shall also apply to the record of uncertificated corporate securities relating to any units of those securities which are participating securities.
Miscellaneous
I3716
F481
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
F49Every register which an Operator is required to maintain by virtue of these RegulationsF9(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.
I3817
1
An entry in a register of securities or in a record of securities relating to a person who no longer holds the securities which are the subject of the entry may be removed from the register or the record (as the case may be) after the expiration of 20 years beginning with the day on which the person ceased to hold any of those securities.
2
Subparagraph (1) does not apply in respect of an entry in a register of members.
I3918
F50Sections 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.
I4019
1
Such sanctions as apply to a company and its officers in the event of a default in complying with F51section 113 of the 2006 Act shall apply to an Operator and his officers in the event of a default in complying with paragraph 4, 12 or 14.
2
Such sanctions as apply to the registrar, within the meaning of the 1974 Regulations, in the event of a default in complying with regulation 5 of those Regulations shall apply to a participating issuer and his officers in the event of a default in complying with paragraph 13 in respect of a local authority security F10falling within paragraph (a)(i) of the definition of “local authority security.
F142A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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;
F13c
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.
I4120
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 F52section 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.
I4221
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 F53section 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.
F16SCHEDULE 5ADAPTATIONS IN RESPECT OF NORTHERN IRELAND
Sch. 5 omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments) (Uncertificated Securities) Order 2009 (S.I. 2009/1889), regs. 1(2), 2(22)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 6TRANSITORY PROVISIONS
I431
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.
I442
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”.
I453
Regulation 5 shall be modified by the substitution for paragraph (4) of—
4
Where the Treasury refuse an application for approval they shall give the applicant a written notice to that effect stating the reasons for the refusal.
I464
Regulation 7 shall be modified by—
a
the insertion in paragraph (2) of the words “subject to paragraph (3)” after the words “they may”; and
b
the substitution for paragraphs (3) to (6) of—
3
Subsections (2) to (7) and (9) of section 11 of the 1986 Act shall apply in relation to the withdrawal by the Treasury of approval from an Operator under paragraph (2) as they apply in relation to the revocation by the Secretary of State of a recognition order under subsection (1) of that section; and in those subsections as they so apply—
a
any reference to a recognised organisation shall be taken to be a reference to an Operator;
b
any reference to members of a recognised organisation shall be taken to be a reference to system-users;
c
any reference to the Secretary of State shall be taken to be a reference to the Treasury;
d
any reference to an order other than a recognition order shall be taken to be a reference to a written instrument; and
e
the reference in subsection (6) to the interests of investors shall be taken to be a reference to the interests of system-users.
I475
Regulation 8 shall be modified by—
a
the substitution for paragraph (4) of—
4
Before giving a direction under paragraph (2)(b) the Treasury shall—
a
if the circumstances permit, consult the Operator and afford him an opportunity to make representations; and
b
so far as is practicable to estimate it, have regard to the cost to the Operator of complying with any term of any direction and to the costs to other persons resulting from the Operator’s compliance.
b
the omission of paragraphs (5) and (7).
I486
In regulation 9—
a
paragraph (7) shall be modified by the substitution of the words “Subsections (6) and (7) of section 61 of the 1986 Act” for the words “Subsections (3) to (5) and (8) of section 382 of the 2000 Act”;
b
paragraphs (10) to (12) shall be modified by the substitution of the words “investment business within the meaning of the 1986 Act” for the words from “business of any of the following kinds” in paragraph (10) to the end of paragraph (12).
I497
Regulation 11(1) shall be modified to read—
1
If it appears to the Treasury that there is a body corporate—
a
to which functions have been transferred under section 114 of the 1986 Act; and
b
which is able and willing to discharge all or any of the functions conferred by this Part of these Regulations,
they may, subject to paragraphs (2) and (5), by instrument in writing delegate all or any of those functions to that body; and a body to which functions are so delegated is referred to in these Regulations as a “designated agency”.
I508
In paragraph 5(7) of Schedule 1—
a
paragraph (a) of the definition of “clearing house” shall be modified by the substitution of the words “for the purposes of the 1986 Act” for the words “within section 285(1)(b) of the 2000 Act”; and
b
paragraph (a) of the definition of “exchange” shall be modified by the substitution of the words “for the purposes of the 1986 Act” for the words “within section 285(1)(a) of the 2000 Act”.
I519
Schedule 2 shall be modified by—
a
the substitution for subparagraph (5) in paragraph 1 of—
5
Subsections (2) to (5), (7) and (9) of section 11 of the 1986 Act shall apply in relation to the withdrawal of approval under subparagraph (3) as they apply in relation to the revocation by the Secretary of State of a recognition order under subsection (1) of that section; and in those subsections as they so apply—
a
any reference to a recognised organisation shall be taken to be a reference to an Operator;
b
any reference to members of a recognised organisation shall be taken to be a reference to system-users;
c
any reference to the Secretary of State shall be taken to be a reference to the Treasury; and
d
any reference to an order other than a recognition order shall be taken to be a reference to a written instrument.
b
the omission from paragraph 2 of subparagraph (5); and
c
the insertion after paragraph 7 of a new paragraph reading—
8
1
Before the Treasury exercise a power under paragraph 1(3)(b) or (c), or their power to refuse leave under paragraph 2(2), or their power to give a direction under paragraph 2(4), in respect of an Operator, they shall—
a
give written notice of their intention to do so to the Operator and take such steps (whether by publication or otherwise) as they think appropriate for bringing the notice to the attention of any other person who in their opinion is likely to be affected by the exercise of the power; and
b
have regard to any representation made within such time as they consider reasonable by the Operator or by any such other person.
2
A notice under subparagraph (1) shall give particulars of the manner in which the Treasury propose to exercise the power in question and state the reasons for which they propose to act; and the statement of reasons may include matters contained in any report received by them under paragraph 3.
SCHEDULE 7MINOR AND CONSEQUENTIAL AMENDMENTS
Part 1Primary Legislation
The National Debt Act 1870
I521
In section 3 of the National Debt Act 187028, for the definition of “Stockholder” there shall be substituted—
“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):
The National Debt (Stockholders Relief) Act 1892
I532
In subsection (1) of section 2 of the National Debt (Stockholders Relief) Act 189229, for the word “inscribed” there shall be substituted “entered in a relevant register”.
The Finance (No. 2) Act 1915
I543
In section 48 of the Finance (No. 2) Act 191530—
a
after “Director of Savings,” there shall be inserted “to the Operator of any relevant system”; and
b
after “by that person” there shall be inserted “; and in this section “Operator” and “relevant system” have the same meanings as they have in the Uncertificated Securities Regulations 2001”.
The Finance Act 1916
I554
In section 67 of the Finance Act 191631—
a
after “Director of Savings,” there shall be inserted “the Operator of any relevant system”; and
b
at the end of that section there shall be added “; and in this section “Operator” and “relevant system” have the same meanings as they have in the Uncertificated Securities Regulations 2001”.
The Finance Act 1949
I565
In section 48 of the Finance Act 194932—
a
in subsection (1), after “Bank of England” where it first appears there shall be inserted “or the Operator of any relevant system”;
b
in the proviso to subsection (1)—
i
for “the Bank of England shall not” there shall be substituted “neither the Bank of England nor any such Operator shall”; and
ii
for “to the Bank” there shall be substituted “to the Bank, or to that Operator as the case may be,”;
c
in subsection (2), after “Bank of England” there shall be inserted “or the Operator, as the case may be,”; and
d
after subsection (4) the following subsection shall be added—
5
In this section, “Operator” and “relevant system” have the same meanings as they have in the Uncertificated Securities Regulations 2001.
The Finance (No. 2) Act 1975
I576
In section 73 of the Finance (No. 2) Act 197533—
a
in subsection (4), after “means” in the definition of “the Bank” there shall be inserted “(subject to subsection (4A))”; and
b
after subsection (4) the following subsection shall be added—
4A
In the case of units of stock which are recorded on a register kept by the Operator of a relevant system—
a
the reference to the Bank in subsection (1) so far as it relates to paragraph (c) of that subsection; and
b
the references to the Bank in subsections (2) and (3) so far as they apply for the purposes of that paragraph,
shall be taken to be references to that Operator; and in this subsection “Operator” and “relevant system” have the same meanings as in the Uncertificated Securities Regulations 2001.
The Companies Act 1985
I587
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).”.
I598
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.”.
I609
In section 209(9B)(b) of the 1985 Act, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.
I6110
In subsection (4) of section 380 of the 1985 Act, after paragraph (k) the following paragraphs shall be added—
l
a resolution of the directors passed by virtue of regulation 16(2) of the Uncertificated Securities Regulations 2001 (which allows title to a company’s shares to be evidenced and transferred without written instrument); and
m
a resolution of a company passed by virtue of regulation 16(6) of the Uncertificated Securities Regulations 2001 (which prevents or reverses a resolution of the directors under regulation 16(2) of those Regulations).
The Financial Services Act 1986
I6211
In subsection (1) of section 180 of the 1986 Act, after paragraph (n) the following paragraph shall be added—
nn
to an Operator approved under the Uncertificated Securities Regulations 2001 if the information is necessary to ensure the proper functioning of a relevant system within the meaning of those Regulations in relation to defaults and potential defaults by market-participants;
I6312
In the 1986 Act, in—
a
paragraph 16A(a) of Schedule 1;
b
Note (3) to that paragraph; and
c
subparagraph (5B)(a) of paragraph 18 of Schedule 1,
for “Uncertificated Securities Regulations 1995” in each place where it occurs there shall be substituted “Uncertificated Securities Regulations 2001”.
The Banking Act 1987
I6413
In the Banking Act 198734, in—
a
paragraph 11B in the first column of the Table in section 84(1);
b
section 84(11)(e),
for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.
Part 2Subordinate Legislation
The Government Stock Regulations 1965
I6514
In the 1965 Regulations—
a
in regulation 1(3), for “Subject (in the case of stock which is a participating security) to any provision made by or under the 1995 Regulations, in” there shall be substituted “In”;
b
in regulation 2(1), for “Subject to Regulation 5 of the Stock Transfer (Gilt-edged Securities) (CGO Service) Regulations 1985 and (in the case of stock which is a participating security) any provision made by or under the 1995 Regulations, every” there shall be substituted “Every”;
c
in regulation 3B(2), for “the register” there shall be substituted—
a
a register kept under regulation 1(1) or (1A) hereof; or
b
a register kept by the Operator of a relevant system under the 2001 Regulations,
d
in regulation 435—
i
the words “and Regulation 4B” shall be omitted from paragraph (1);
ii
after paragraph (4) there shall be inserted—
5
Units of stock which are recorded on a register kept by the Operator of a relevant system under the 2001 Regulations shall be transferable in no other manner than by means of that system in accordance with those Regulations.
6
A strip shall be transferable in no other manner than by means of a relevant system operated by an Operator in accordance with the 2001 Regulations.
e
in regulation 5, for “Subject (in the case of stock which is a participating security) to any provision made by or under the 1995 Regulations, the” there shall be substituted “The”;
f
in regulation 10—
i
for “Subject (in the case of stock which is a participating security) to any provision made by or under the 1995 Regulations, the” there shall be substituted “The”; and
ii
there shall be omitted the words from “or, in the case of an exempt transfer” to the end;
g
in regulation 14(6), 15(4) and 16(4)—
i
there shall be omitted the words “to Regulation 4B and”; and
ii
for “the 1995 Regulations” there shall be substituted “the 2001 Regulations”;
h
in regulation 23(1), for ““the 1995 Regulations” means the Uncertificated Securities Regulations 1995 as amended from time to time;” there shall be substituted ““the 2001 Regulations” means the Uncertificated Securities Regulations 2001 as amended from time to time;”;
i
in regulation 23(1), the definitions of “the CGO Service”; “CGO Service member”; and “an exempt transfer” shall be omitted; and
j
in regulation 23(1A), for “the 1995 Regulations” there shall be substituted “the 2001 Regulations”.
The Local Authority (Stocks and Bonds) Regulations 1974
I6615
In the 1974 Regulations—
a
in regulation 1(3)—
i
for ““the 1995 Regulations” means the Uncertificated Securities Regulations 1995 as amended from time to time;” there shall be substituted ““the 2001 Regulations” means the Uncertificated Securities Regulations 2001 as amended from time to time;”; and
ii
the definitions of “the CGO Service”; “CGO Service member”; “the CGO Service Regulations”; and “exempt transfer” shall be omitted;
b
in regulation 6(1), for “Subject to regulation 6A below the” there shall be substituted “The”;
c
in regulation 7—
i
in paragraph (1)(a), for “paragraph (5)” there shall be substituted “paragraph (1A)”;
ii
after paragraph (1) there shall be inserted as a new paragraph—
1A
Units of stock, or of bonds, which are recorded on a register kept by the Operator of a relevant system under the 2001 Regulations shall be transferable in no other manner than by means of that system in accordance with those Regulations.
iii
in paragraph (3), there shall be omitted “and any record of a transfer effected through the medium of the CGO Service,” and “or, as the case may be, the exempt transfer”; and
d
in regulation 13(2)—
i
for “Subject (in the case of stock or a bond which is a participating security) to any provision made by or under the 1995 Regulations, the” there shall be substituted “The”; and
ii
there shall be omitted the words from “or, in the case of an exempt transfer” to the end.
The Exchange of Securities (General) Rules 1979
I6716
In the Exchange of Securities (General) Rules 197936—
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.
ii
there shall be inserted as a new paragraph after paragraph (1A)—
1B
In paragraph (1A), the expressions “uncertificated units of a security” and “relevant system” shall have the same meanings as they have in the Uncertificated Securities Regulations 2001.
The Companies (Registers and other Records) Regulations 1985
I6817
In the Companies (Registers and other Records) Regulations 198537—
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.
d
in regulation 6—
i
in paragraph (1), after “the Act” there shall be inserted “or the 2001 Regulations”; and
ii
after paragraph (2) there shall be inserted as a new paragraph—
2A
In the case of a company which is a participating issuer, paragraph (2) shall apply as if—
a
references to the register of members were references to the company’s issuer register of members and record of uncertificated shares; and
b
the reference to the index of the register of members were a reference to an index kept by virtue of paragraph 7 of Schedule 4 to the 2001 Regulations.
The Stamp Duty Reserve Tax Regulations 1986
I6918
In the Stamp Duty Reserve Tax Regulations 198638, in the definition of “the Treasury Regulations” in regulation 2, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.
The Companies (Registers and other Records) Regulations (Northern Ireland) 1986
I7019
In the Companies (Registers and other Records) Regulations (Northern Ireland) 1986 39—
a
in regulation 1—
i
at the end of the definition of “register” in paragraph (2) there shall be inserted “or regulation 20 of the 2001 Regulations”; and
ii
at the end of paragraph (2) there shall be inserted—
“the 2001 Regulations” means the Uncertificated Securities Regulations 2001; and expressions defined in the 2001 Regulations shall have the same meaning in these Regulations.
b
at the end of regulation 3 there shall be inserted as new paragraphs—
5
This Regulation applies with respect to an issuer register of members and a record of uncertificated shares which is kept by a company by recording the matters in question otherwise than in legible form—
a
as it applies to a register of members under the Order which is kept in like fashion; and
b
as if references to the Order were references to the 2001 Regulations.
6
This Regulation applies with respect to an index kept by virtue of paragraph 7 of Schedule 4 to the 2001 Regulations which is kept by a company by recording the matters in question otherwise than in legible form—
a
as it applies to an index of a register of members under the Order which is kept in like fashion; and
b
as if references to the Order were references to the 2001 Regulations.
c
at the end of regulation 4 there shall be inserted as a new paragraph—
6
In the case of a company which is a participating issuer, references in this regulation to the register of members shall be taken to be a reference to the company’s issuer register of members and record of uncertificated shares.
d
in regulation 7—
i
in paragraph (1), after “the Order” there shall be inserted “or the 2001 Regulations”; and
ii
after paragraph (2) there shall be inserted as a new paragraph—
2A
In the case of a company which is a participating issuer, paragraph (2) shall apply as if—
a
references to the register of members were references to the company’s issuer register of members and record of uncertificated shares; and
b
the reference to the index of the register of members were a reference to an index kept by virtue of paragraph 7 of Schedule 4 to the 2001 Regulations.
The Financial Markets and Insolvency Regulations 1996
I7120
In the Financial Markets and Insolvency Regulations 199640—
a
in regulation 2(1)—
i
in the definition of “register of securities”, for “a register maintained by the issuer, whether by virtue of the 1995 Regulations or otherwise” there shall be substituted “a register, whether maintained by virtue of the Uncertificated Securities Regulations 2001 or otherwise”;
ii
the definition of “the 1995 Regulations” shall be omitted;
iii
in the definition of “relevant nominee”, for “paragraph 19(d) of Schedule 1 to the 1995 Regulations” there shall be substituted “paragraph 25(f) of Schedule 1 to the Uncertificated Securities Regulations 2001”;
iv
in the definition of “transfer”, for “the generation of an Operator-instruction requiring a participating issuer to register a system-member on the relevant register of securities as the holder of those units;” there shall be substituted “the registration of a transfer of title to those units in the relevant Operator register of securities;”; and
v
in the full-out to regulation 2(1), for “the 1995 Regulations” there shall be substituted “the Uncertificated Securities Regulations 2001”;
b
in regulation 2(2)(a), for “regulation 19 of the 1995 Regulations” there shall be substituted “regulation 20, 21 or 22 of the Uncertificated Securities Regulations 2001”; and
c
in regulation 5(a)(ii), for “regulation 25(1)(a) or 25(2)(a) of the 1995 Regulations” there shall be substituted “regulation 31(2)(b) or 31(4)(b) of the Uncertificated Securities Regulations 2001”.
The Stock Transfer (Addition and Substitution of Forms) Order 1996
I7221
In the Stock Transfer (Addition and Substitution of Forms) Order 199641, in paragraph (2) of article 1, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.
The Financial Services Act 1986 (Exemption) Order 1996
I7322
In the Financial Services Act 1986 (Exemption) Order 199642, in paragraph (3) of article 1, for “Uncertificated Securities Regulations 1995” in both places where it occurs there shall be substituted “Uncertificated Securities Regulations 2001”.
The Stamp Duty Reserve Tax (UK Depository Interests in Foreign Securities) Regulations 1999
I7423
In the Stamp Duty Reserve Tax (UK Depository Interests in Foreign Securities) Regulations 199943, in the definition of “foreign securities” in regulation 2, for “Uncertificated Securities Regulations 1995” there shall be substituted “Uncertificated Securities Regulations 2001”.
The Open-Ended Investment Companies Regulations 2001
I7524
In the Open-Ended Investment Companies Regulations 2001—
a
in regulation 2(1), the definitions of “certificated form”, “participating issuer”, “participating security”, “uncertificated form” and “uncertificated unit of a security” shall be omitted;
b
for regulation 50(2) there shall be substituted—
2
Paragraph (1) has effect subject to any requirements contained in FSA rules.
c
in paragraph 2(1) of Schedule 3, the words “Subject to sub-paragraph (2)” shall be omitted.
Sch. 1 heading substituted (27.3.2019) by The Uncertificated Securities (Amendment and EU Exit) Regulations 2019 (S.I. 2019/679), regs. 1(2), 4(9)(a) (with regs. 10-12)