These Regulations implement in part Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (OJ No L 145, 30.4.2004, p.1) (“the Directive”). The Directive is also implemented by other statutory instruments, including the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384) and the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) (Amendment) Regulations 2006 (S.I. 2006/3386), and by the Financial Services Authority using powers under the Financial Services and Markets Act 2000 (c. 8).

The Regulations amend Schedule 1 to the Uncertificated Securities Regulations 2001 (S.I. 2001/3755) which sets out the requirements for approval of a person as an operator of a computer-based system which enables title to units of a security to be evidenced and transferred without a written instrument. They add a new requirement, transposing in part Article 34 of the Directive, for any person approved as an operator to maintain transparent and non-discriminatory rules governing access to any settlement facilities he provides. The rules must grant investment firms (within the meaning of the Directive) and credit institutions (as defined in Directive 2006/48/EC (OJ No L 177, 30.6.2006, p.1)) authorised in other EEA States access to those settlement facilities on the same terms as access is granted to firms and institutions established in the United Kingdom.

A transposition note has been prepared which sets out how the main elements of the Directive will be transposed into UK law. A Regulatory Impact Assessment of the effect of this instrument and the other instruments transposing the Directive on the costs of business has been prepared. Both may be obtained from the Financial Services Strategy Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ. They are also available on HM Treasury’s website (www.hm-treasury.gov.uk). Copies of both documents have been placed in the libraries of both Houses of Parliament.