The Uncertificated Securities Regulations 1992

• Citation: S.I. 1992/225
• Sections: 155

Section 1 Citation and commencement

These Regulations may be cited as the Uncertificated Securities Regulations 1992 and shall come into force on the day after the day on which they are made.

Section 2 Interpretation

(1) In these Regulations (unless the context otherwise requires):

“the 1985 Act ” means the Companies Act 1985 :

“the 1986 Act ” means the Financial Services Act 1986 ;

“the 1986 Order ” means the Companies (Northern Ireland) Order 1986 ;

“the 1989 Act ” means the Companies Act 1989;

“account holder” means a person for whom a controller holds an entitlement (whether or not the entitlement has been expressly allocated to that person by an entry in a record of account holders), save that where a controller holds an entitlement for two or more persons acting jointly those persons jointly shall be regarded as the account holder for the purposes of these Regulations;

“alternative company controller” means a company controller appointed under regulation g(3); that is to say having discretion to refuse to hold an entitlement to a unit of the security for any person for whom he or it is appointed to act;

“the appropriate register” means the register on which holders of units of a security of the kind in question are by virtue of any enactment required to be recorded or (in the absence of such enactment) on which the holders of the security in question are required to be recorded by the terms of its issue; in particular, the appropriate register is, in the case of shares, the company’s register of members maintained under section 352 of the 1985 Act;

“approved person” means a person admitted under regulation 94 to perform the functions of an approved person under these Regulations;

“certificated”, in connection with any security, means a security, the title to a unit of which is, by virtue of any enactment, instrument or rule of law:

required to be evidenced by a certificate or other document in writing; or

transferable only by means of an instrument in writing;

“commercial controller” means a person admitted under regulation 94 to perform the functions of a commercial controller under these Regulations (in particular regulation 13) with respect to any uncertificated security of any company, save that a person, not being a company controller, recorded as holding entitlements on an Operator’s record of entitlements shall be regarded as a commercial controller for the purposes of the registration of the holders of the security concerned notwithstanding that that person has not been so admitted or that person’s admission has terminated;

“communication” includes any instruction, election, acceptance or any other message of any kind;

“company” means a company within the meaning of section 735 of the 1985 Act;

“company controller” means a person who is appointed by a company under regulation 9 to perform the functions of a company controller (whether primary or alternative) under these Regulations with respect to an uncertificated security of the company;

“company’s record of entitlements” means a record kept by a company under regulation 25;

“Complaints Commissioner” means the person appointed under regulation 99;

“controller” means either a commercial controller or a company controller;

“court of competent jurisdiction” means a court having jurisdiction over the matter in question;

“default nominee”, in relation to a controller, means a person appointed by the controller under regulation 61;

“duty”, where there is a reference to the duties of a person, includes any obligation imposed on that person under these Regulations whether or not expressed to be a duty; an “enactment” includes an enactment comprised in any subordinate legislation within the meaning of section 21(1) of the Interpretation Act 1978 or (in the case of the law of Northern Ireland) an instrument within the meaning of section 1 of the Interpretation Act (Northern Ireland) 1954 ; an “entitlement” means the power with respect to a unit of an uncertificated security referred to in regulation 22;

“fixed register date” means such date as is referred to in regulation 44;

“general call for instructions” means a call by a company for proper instructions to register from controllers under regulation 45;

“the holder”, in relation to a unit of a security, means a person registered as its holder, save that where a unit is registered in the name of two or more persons acting jointly, those persons jointly shall be regarded as the holder of the unit for the purposes of these Regulations;

“insolvency practitioner” means a person acting as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986 and any person performing similar functions under the law of any country outside the United Kingdom, together with any form of receiver appointed in connection with the dissolution of any body of persons whether or not as a consequence of insolvency;

“instrument” includes a deed and any other instrument in writing, including the memorandum and articles of association of a company;

“jurisdiction” means one of the three territorial divisions of the United Kingdom with a distinct system of law, namely England and Wales, Scotland and Northern Ireland;

“limited instruction to register” means a proper instruction to register of the kind referred to in regulation 20(2)(b);

“lost benefit” means any dividend, interest or other benefit which should have been received, but was not received due to a failure of a person to perform functions under these Regulations, but does not include a new unit;

“lost unit” means a unit of a security entitlement to which was, or should have been, held by a particular controller but which is no longer, or is not, so held due to a failure of a person to perform functions under these Regulations;

“new unit” means a unit of a security or an interest in a unit of a security to which, where a takeover, rights issue or other event has occurred, a person was entitled but did not obtain due to the failure of a person to perform functions under these Regulations or to which a person would have been entitled but for such a failure;

“notification of a transaction” means a notification of a transaction with respect to a unit of a security (or the entitlement to it) to the Operator or (as the case may be) a company under regulation 31;

“officer”, in addition to the meaning given to it by the 1985 Act, shall include, in relation to a partnership, any partner thereof;

“official receiver” means the official receiver as defined in section 399 of the Insolvency Act 1986;

“the Operator” means The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited or such other person as is for the time being substituted as the Operator in accordance with regulation 8;

“the Operator’s part of the system” means those procedures within the system involving the participation of the Operator (whether directly or as agent of any other person) or the use of facilities provided by the Operator (and includes procedures relating to the making of communications by means of those facilities);

“Operator’s record of entitlements” means a record kept by the Operator under regulation 24;

“participant” means a controller, an approved person or any person who may, under the system, notify a transaction under regulation 31;

“periodic update” means any update of the appropriate register for an uncertificated security under regulation 41 as a consequence of which a new version of the register is produced;

“primary company controller” means a company controller appointed under regulation 9(1) or (2); that is to say having no discretion to refuse to hold an entitlement to a unit of the security for any person for whom he or it is appointed to act;

“proper instruction to register” means such instruction as is referred to in regulation 20;

“record of account holders” means a record kept by a controller under regulation 28;

“record of entitlements” means the company’s record of entitlements or the Operator’s record of entitlements;

“register event” has the meaning ascribed to it by regulation 43; “Regulations” includes any applicable rules made under these Regulations;

“securities” means shares, stock, debentures, debenture stock, loan stock, bonds and other securities of any description of a company (including subscription warrants) and “security” means a particular type of security of a particular company;

“standing instruction to register” means a proper instruction to register of the kind referred to in regulation 20(2)(a);

“the system” means the procedures for transferring and .recording title to units of a security and the ancillary procedures set out in these Regulations, together with any supplementary procedures or requirements prescribed by rules made under regulation 112;

“terms of issue”, in relation to a security, includes the terms on which units of the security are held or transferred;

“title”, in connection with an uncertificated security, means the title which would be obtainable by a person through being properly registered as the holder of a certificated security of the same kind on the appropriate register for that security;

accordingly in England and Wales and Northern Ireland “title” means legal title unless the process of registration of a certificated security of the same kind confers only an equitable title;

“ the tribunal ” means the Financial Services Tribunal performing functions for the purposes of regulations 96 and 103;

“type”, in connection with a security, means an issue, or a series of issues, of units of securities of a company conferring uniform rights and obligations on each of the holders of units of securities of that description (for example equity shares of a particular class ranking pari passu);

“uncertificated”, in connection with a security, means a security the title to units of which, under these Regulations, is not required to be evidenced by a certificate or which is otherwise transferable under these Regulations;

“unit of a security” means a single example of a particular security (for example a single share) or (in the case of stock) the smallest transferable unit of the security;

“a valid communication” is a communication effected in accordance with the Operator’s part of the system which conforms with any applicable rules made under regulation 112 as to the form and manner in which a communication is to be made;

“working day” means any day except Saturday, Sunday, Good Friday, Christmas day or a bank holiday within the meaning of the Banking and -Financial Dealings Act 1971 ; and other expressions bear the meaning given to them in the 1985 Act or (as the case may be) the 1986 Order.

(2) References in these Regulations to the date “by reference to which” the appropriate register for an uncertiticated security is or is to be updated are to a fixed register date in relation to the security or the date specified in a general call for instructions.

(3) References in these Regulations (however expressed) to the admission of a security into the system by the Operator are to be construed as referring to its giving consent to the conversion of the security into, or its issue in, uncertificated form.

(4) References in these Regulations to the functions of the Operator include reference to functions delegated to the Operator under regulation 3.

Section 3 Delegation of functions

(1) Where a function to which this regulation applies is expressed to be exercisable by the Operator, it shall, notwithstanding that fact, be vested in and exercisable by the Secretary of State unless for the time being delegated to the Operator in accordance with this regulation.

(2) The Secretary of State may by written instrument delegate to the Operator all or any of the functions to which this regulation applies except that he shall not delegate the function of making rules under regulation 105 defining the persons or classes of person eligible for compensation under the scheme.

(3) Any function may be delegated either wholly or in part.

(4) The Secretary of State shall not delegate the whole or any part of the function unless it appears to him that the Operator is able and willing to exercise it.

(5) The Secretary of State may by written instrument resume all or any functions he has delegated.

(6) Any function may be resumed either wholly or in part.

(7) This regulation applies to functions under or by virtue of regulations 14, 15, 56, 75, 76, 78, 80, 81(2), 84, 85, 88, 94, 95, 96, 97, 98, 105, 106(1)(b), 111 and 112.

(8) Paragraphs 6 to 9 and 12(1) to (3)(a) of Schedule 9 to the 1986 Act shall, with any necessary modifications and subject to paragraph (9) below, apply to the exercise of any rule making function as they apply to legislative functions exercisable by the designated agency under that Act.

(9) The application of paragraph 12(1) to (3)(a) of Schedule 9 to the 1986 Act shall not have effect in relation to any proposal which takes a form specified in a direction given by the Secretary of State under regulation 6.

Section 4 Operation of the system

Subject to the consent of the Secretary of State being given under regulation 5, and in addition to any other duties imposed by these Regulations, it shall, to the extent that the Operator exercises relevant functions under these Regulations, be the duty of the Operator, owed to the Secretary of State:

(a) to,operate the Operator’s part of the system;

(b) to admit and supervise participants;

(c) to maintain such computer-based facilities as are reasonably necessary to enable the Operator to comply with its functions under these Regulations;

(d) to ensure that at all times the conditions specified in regulation 5(1)(b)(i) to (iii) are satisfied;

(e) to co-operate, by the sharing of information and otherwise, with the Secretary of State and any other body or authority having responsibility for the supervision of investment business and other financial services; and

(f) to have regard, in performing its functions under these Regulations, to the protection of investors.

Section 5 Commencement of operation of system

(1) If the function of admitting securities into the system is delegated to it, the Operator shall not admit the first security into the system unless it has notified the Secretary of State that:

(a) a compensation scheme has been established in accordance with Part XIV of these Regulations;

(b) it is satisfied that it is ready and able to perform the duties specified in regulation 4 and that:

(i) there exist the facilities required under regulation 4(c), that they comply with these Regulations, that it is ready to operate them effectively and efficiently and that it has in place in relation to the facilities and their operation appropriate safeguards to reduce, so far as it is reasonably practicable to do so, the possibiity of error or fraud and of unauthorised access to, or manipulation of, data or programs for the time being on or transmitted through, the facilities;

(ii) if relevant functions in relation to the admission and supervision of participants are delegated to it, each participant is required to have in place safeguards to reduce, so far as it is reasonably practicable to do so, the possibility of unauthorised access, to or manipulation of, data or programs for the time being on, or transmitted through, the facilities of the Operator;

(iii) if the function of admitting participants is delegated to it, it has properly performed its obligations in connection with those persons whom at the date of the notification it has agreed to admit as participants

and the Secretary of State has given his consent.

(2) The Secretary of State shalll not refuse consent under paragraph (1) unless it apears to him that the Operator’s notification to him under that pararaph is not well-founded.

Section 6 Powers of Secretary of State to give directions

(1) The Secretary of state shall consider;

(a) any relevant complaint made to him;

(b) any information in any report made to him by the Operator under regulation 7;

(c) any information in a report made to him by the Complaints Commissioner

for the purpose of determining whether he should give directions to the Operator in accordance with paragraph (2).

(2) If, whether or not as a result of any such complaint or information, at any time the Secretary of State concludes that the Operator is failing or may be about to fail to perform its functions under these Regulations, or that if a notification were then made to him under regulation 5(1) he could not give his consent, he may give to the Operator such directions as he considers necessary to secure that such failures are corrected or that matters are such that he could give his consent.

(3) Before giving a direction under this regulation the Secretary of State shall, if circumstances permit, consult the Operator and afford it an opportunity to make representations.

(4) In deciding whether to give a direction under this regulation, the Secretary of State shall, so far as it is practicable to estimate it, take into account the cost to the operator of complying with the direction and costs to other persons resulting from the operator’s compliance.

(5) It shall be the duty of the Operator, owed to the Secretary of State, to comply with a direction under this regulation.

(6) The Operator shall furnish the Secretary of State with such information as he may reasonably require for the purpose of exercising his functions under this regulation or regulation 5 and, for these purposes, may give such directions to participants as it considers necessary.

Any information to be furnished to the Secretary of State shall, if he so requires, be in such form or verified in such manner as he may specify.

(7) Section 192(1), (4) and (6) of the 1986 Act (International Obligations) shall apply to the Operator as it applies to the persons mentioned in subsection (2) of that section.

Section 7 Operator’s report

(1) The Operator shall made such reports to the Secretary of State on or in connection with the discharge of its functions under these Regulations as the Secretary of State may require.

(2) Without prejudice to the generality of paragraph (1), the Secretary of State may require that reports deal with specified subjects, or specified periods of time, and may require that they set out details of complaints received by the Operator and of the Operator’s response to complaints.

Section 8 Powers of Secretary of State to substitute new Operator

(1) If at any time:

(a) the Secretary of State considers that there exist, or are about to exist, conditions which would enable him to give a direction under regulation 6, but that such a direction would not secure that the relevant failures were corrected or that matters were such that he could give the consent referred to in that regulation; or

(b) the Operator so requests,

the Secretary of State may substitute another person (including one whom he has established for the purpose) as the Operator.

Before substituting a person under sub-paragraph (a), the Secretary of State shall, if circumstances so permit, inform the Operator of the grounds upon which he proposes to make the substitution and afford the operator an opportunity to make representations.

(2) The Secretary of state may, in connection with any such substitution, by instrument in writing, make provision:

(a) for the carrying on and completion by the substituted Operator of anything in the process of being done by the former Operator at the time of the substitution; and

(b) for the substitution of the substituted Operator for the former Operator in any instrument, contract or legal proceedings.

(3) The Secretary of State may direct that property of the former operator shall be made available to the substituted Operator for the purpose of enabling the substituted Operator to exercise its functions under these Regulations to such extent, and for such period, as appears to him to be necessary to ensure that the system continues to function in an orderly manner and that investors are properly protected; and it shall be the duty of the former Operator, and any insolvency practioner acting in relation to the former operator, to comply with any such direction.

(4) Nothing in paragraph (3) shall be taken as enabling the Secretary of State to deprive the former operator of the use of any property without securing the payment of appropriate compensation, whether at the time of the direction or as soon as circumstances permit its calculation, having regard to any liabilities (including contingent liabilities) or obligations which the substituted operator may assume.

In exercising the powers conferred on him by paragraph (3), the Secretary of State shall have regard to any other purposes for which the property is being used by the Operator acting in any other capacity recognised or conferred by any enactment.

(5) It shall be the duty of a former Operator, notwithstnding that it is the subject of insolvency proceedings, to preserve any records it may hold relating to the system until transferred to the substituted Operator under paragraph (3) or for five years (whichever is the shorter period).

Any insolvency practioner appointed in relation to the Operator shall be under the same duty.

(6) It shall be the duty of a substituted Operator which has received any records, or copies of records, under this regulation, to permit their inspection and copying by any person who is an officer of the former Operator, or any insolvency practioner appointed in relation to that Operator, or the official receiver.

(7) Functions delegated to a former Operator shall be deemed to be delegated to a substituted Operator.

Section 9 Company controllers

(1) A company which has in issue an uncertificated security must at all times have a person appointed by it to act as a controller with respect to that security having no discretion to refuse to hold an entitlement to a unit of security for any person; a controller appointed by a company having no discretion to hold an entitlement for the persons in respect of whom he or it is appointed to act is known in these regulations as a“primary company controller”.

(2) A company may appoint two or more persons to act concurrently as primary company controllers:

(a) each being appointed to hold entitlements for a separate cagegory or separate categories of persons determined by such criterion or criteria as the comapny considers fit; or

(b) each being appointed to hold entitlements for the same category or categories of person,

or a combination of these.

Where a company so appoints more than one primary company controller, there must be, amongst the controllers so appointed, a controller appointed to hold entitlements for any given category of person.

(3) A company may in addition appoint one or more controllers having discretion to refuse to hold an entitlement to a unit of security of the company for a person for whom the controller is appointed to act; such a controller may be appointed to hold entitlements for any person or with respect to any category or categories of persons and is known in these Regulations as an“alternative company controller”.

(4) A company shall not appoint a person to act as a company controller unless it has satisfied itself that the person concerned:

(a) has been admitted as a participant under regulation 94 to perform the functions of a company controller with respect to the security concerned;

(b) has appointed a person in each jurisdiction (other than a jurisdiction in which the first mentioned person is incoporated or has an established place of business upon which service may be made under the law of that jurisdiction) to accept on his or its behalf service of any process in connnection with the performance of his or its functions under these regulations and the person appointed is ready and willing to accept such service; and

(c) has appointed a person (other than himself or itself) to be his or its default nominee for the purposes of these Regulations.

(5) A company may appoint iteslf or one of its subsidiary undertakings (within the meaning of part VII of the 1985 Act) as a company controller (whether primary or alternative).

(6) A company shall, for each of its uncertificated securities, maintain a list of controllers appointed by it with respect to that security which, for each controller, sets out:

(a) the name of the company and the identity of the security;

(b) the name of the controller;

(c) whether the controller is a primary or alternative company controller;

(d) the category, or categories, of persons for whom the controller is appointed to hold entitlements;

(e) (if a body corporate) the address of the controller’s office;

(f) (if a body corporate) the country of the controller’s incorporation;

(g) (if an individual or unincorporated body of persons) the address of his or its principal place of business;

(h) the name and address of any persons appointed to accept service of process on the controller’s behalf or otherwise the place in each jurisdiction upon which service may be effected in connection with the performance of the controller’s functions under these Regulations; and

(i) the name and address of the controller’s default nominee.

The company shall:

make the list available for the inspection of any person at its registered office during business hours on any working day; and

deliver a copy of the list, and of any amended list, to the registrar of companies for registration within 5 working days of its preparation or amendment.

(7) A company controller shall notify the company of any change in the particulars listed with respect to him or it in the list maintained under paragraph (6) which are required by sub-paragraphs (b), (e) to (g) or (i) of that paragraph and may notify the company which he or it wishes to amend the particulars given in the list in respect of sub-paragraph (h) thereof. The company shall amend the list as soon as practicable after receipt of any such notice.

(8) Section 352(5) of the 1985 Act shall apply to a default in complying with the provisions of paragraph (6) and the second sentence of paragraph (7) as it applies with respect to a default in coplying with section 352 of that Act.

(9) A company shall be jointly and severally liable with a person appointed by it to act as a company controller for any failure of that person, acting as a company controller for that company, to perform his or its duties under these regulations.

Section 10 Company controllers: authorisation and duties

(1) A company controller has authority, by virtue of his or its appontment, to hold entitlements for persons within the category or categories of persons in respect of which he or it is appointed, without the necessity of obtaining any separate authority from those persons.

Subject to these Regulations, it is the duty of a company controller, owed to the company appointing him or it, to hold entitlements only for persons he or it has authority to hold entitlements for, but any other duty imposed by these Regulations on a company controller owed to an account holder is owed by the controller irrespective of whether he or it has authority to hold entitlements for that account holder.

(2) Where a company has appointed more than one primary company controller to hold entitlements for the same category of person, it is for the company to determine which controller is to hold entitlements for a particular person falling within that category.

(3) Where a company has appointed an alternative company controller, a person may expressly elect to have any entitlements to units of the security in question, which are or are to be held for that person, held by an alternative company cotroller by giving instructions to the company accordingly, which shall make any necessary arrangements.

However a company may treat a person:

(a) falling within the category or categories of person for which an alternative company controller is appointed;

(b) for whom any entitlements are or are to be held by a company controller; and

(c) who has not given instructions that the entitlements be held by a prinary company controller,

as having elected to have the entitlements held by an alternative company controller.

Where the company has appointed more than one alternative company controller with respect to the same category or categories of persons, it is for the company to determine, in the absence of express instructions from the person for whom entitlements are to be held, which alternative company controller is to hold the entitlements in a particular case, class of case or generally. This paragraph is without prejudice to an alternative company controller’s right, under the terms of his or its appointment, to refuse to hold entitlements for a particular person.

(4) Subject to any requirement imposed on a company controller by these Regulations and to the following paragraphs of this regulation, a company controller is under a duty to each of his or its account holders to act in accordance with, and only in accordance with, the instructions of that account holder in connection with entitlements held for that account holder. However no instruction is receivable by a company controller for the purposes of any provision of these Regulations unless the instruction:

(a) (if given by means of the Operator’s part of the system) has been given by an approved person; and

(b) (if given by other means) has been given in writing signed by the account holder (in the case of persons acting jointly being together an account holder, by each of them).

(5) Subject to the next paragraph, a company controller, unless he or it has actual notice to the contrary with respect to a particular purported instruction, shall be entitled and bound to treat any instruction comprised in a valid communication which is purportedly issued on behalf of one of his or its account holders as being issued by an approved person with the authority of that account holder, who shall be bound by the communication accordingly. This paragraph is without prejudice to the liability of any person for the giving of an instruction without authority.

(6) A company controller shall not comply with an instruction or purported instruction given in the form of a valid communication or otherwise on behalf of an account holder by an approved person where, and to the extent that, it is in receipt of a written instruction from the account holder the effect of which is that the controller is not to act in accordance with such instructions; where such a written instruction has once been given it shall continue to have effect to the extent that it has not been expressly cancelled by a further written instruction.

Section 11 Duty of company to facilitate communications

(1) A company that has appointed more than one primary company controller shall appoint on behalf of those controllers a person (which may be the company or one of the primary company controllers) to act as agent of those controllers in connection with the receipt and transmission of any communications to and from the Operator or participants by means of the Operator’s part of the system.

(2) The Operator and any participant, unless they have actual notice to the contrary with respect to a particular purported communication, shall be entitled and bound to treat any valid communication which is purportedly issued on behalf of a primary company controller by a person so appointed as being issued with the authority of the controller, who shall be bound by the communication accordingly. This paragraph is without prejudice to the liability of the person so appointed for the making of a communication without authority.

(3) A company shall be jointly and severally liable with a person appointed by it to act as an agent under this regulation for any failure of that person, acting as such agent, to receive and transmit communications in a timely and accurate manner.

Section 12 Company controllers: further provisions

Schedule 1 to these Regulations has effect with respect to further provisions governing company controllers.

Section 13 Commercial controllers Commercial controllers: authorisation and duties

(1) A commercial controller has authority to hold entitlements for a person other than himself or itself if, but only if, he or it has an agreement with that person to do so (in the case of entitlements to be held for two or more persons acting jointly, if he or it has such agreement with each such person) and that agreement:

(a) sets out the extent of the authority of the controller to deal with entitlements held for that person;

(b) provides for the form and manner in which any instructions for the purposes of any provision of these Regulations required by the terms of such authority are to be receivable by the controller; and

(c) appoints the controller as the agent of the account holder for the transmission of communications by means of the Operator’s part of the system relating to entitlements held or to be held for the account holder or the units of a security to which the entitlements relate (including communications with respect to any right, privilege or benefit attaching to, or arising from, such units).

(2) Subject to these Regulations (and in particular regulation 51), it is the duty of a commercial controller:

(a) to hold entitlements only for persons he or it is authorised to hold entitlements for; and

(b) upon:

(i) receiving actual notice that he or it holds an entitlement for a person he or it has no authority to hold entitlements for in circumstances where the con-troller has not consented to the transfer of the entitlement and the entitlement is not subject to an instruction of the kind referred to in regulation 34; and

(ii) failing to obtain authority from the person concerned within 5 working days of having received such notice,

forthwith to notify a transaction to the Operator under which the entitlement is to be transferred to a primary company controller (or to such other controller as the person concerned may have instructed under paragraph (3)) and to instruct that controller to hold the entitlement for the person concerned (for this purpose no instructions from the person concerned being required);

but any duty imposed by these Regulations on a commercial controller owed to an account holder is owed by him or it irrespective of whether he or it has authority to hold entitlements for that account holder.

(3) Subject to paragraph (2) and these Regulations, for as long as a commercial con-troller holds entitlements for an account holder he or it has no authority to hold for, it is the duty of the commercial controller:

(a) to act on the written instructions, and only on the written instructions, of the account holder in dealing with entitlements held for that account holder or otherwise for the purposes of any provision of these Regulations; and

(b) not to make any communications on behalf of the account holder unless he or it has been expressly authorised in writing to do so,

provided that the controller shall not act on any purported instruction, or authority to make a communication, unless signed by the account holder (in the case of two or more persons acting jointly, by each of them).

(4) An agreement between a commercial controller and one of the controller’s account holders entered into for the purposes of paragraph (1) shall be deemed to continue to exist, notwithstanding that the agreement may have terminated for any reason, until the controller has actual notice of its termination (whether on death or otherwise).

(5) A company or any other recipient, unless they have actual notice to the contrary with respect to a particular communication, shall be entitled and bound to treat any communication, given in the form of a valid communication, which is purportedly issued on behalf of the holder of a unit of a security or one of his or its account holders by a commercial controller as having being issued with the authority of the person on whose behalf it is purportedly issued, who shall be bound by the communication accordingly. This paragraph is without prejudice to the liability of the person so appointed for the making of a communication without authority, but it applies whether or not the holder of a unit or account holder concerned is identified in the communication, provided that the identity of the holder or account holder is, within such period as the recipient of the communication may reasonably require, notified to the recipient by the controller concerned.

(6) In addition a company, unless it has actual notice to the contrary, shall be entitled and bound to treat any commercial controller who has instructed the registration of a person as the holder of units of a security of a company as having the authority to hold, for that person, entitlements to any units of a security of the company to be issued or transferred to the person by reference to the units with which he is registered.

(7) Notwithstanding any provision to the contrary in an agreement made for the purposes of paragraph (1) (but in addition to any other means provided therein for the termination of the agreement), an account holder has the right, without penalty (but subject to any reasonable charges and any accrued liabilities), to send a notice in writing to his commercial controller terminating the controller’s authority to hold entitlements for the account holder. Such a notice shall have no effect on any instructions already given by the account holder to the controller.

Section 14 Replacement of commercial controller

(1) If:

(a) it appears to the Operator that there is a risk to the interests of persons or of any category of persons for whom a commercial controller holds entitlements which cannot adequately be dealt with under the other provisions of these Regulations;

(b) a commercial controller so requests; or

(c) the Operator’s power of termination under regulation 96 has become exercisable

the Operator may effect a transfer of entitlements held by the controller concerned to another controller (including one which it has established for the purpose), such controller having a duty to hold those entitlements for the persons for whom the controller concerned held them, by amending its record of entitlements accordingly and without the necessity of obtaining any consent from the controller concerned.

(2) It is the duty of any commercial controller from whom entitlements have been transferred in accordance with paragraph (1), and of any officer of such a controller and of any insolvency practitioner appointed in relation to that controller, to preserve and deliver up to the Operator such records, or copies of records (including any instructions received under regulation 34) as the Operator may reasonably require and to provide all necessary co-operation in connection with the effecting of any such transfer. It is also the duty of such a person to notify the Operator of any entitlements to which regulations 34, 51, 52 or 53 apply.

(3) As soon as practicable after effecting a transfer under this regulation, the Operator shall inform the account holders concerned of the transfer and the identity of the controller to whom the entitlements have been transferred. The Operator shall give to the transferee controller any record or information received by the Operator under paragraph (2) as soon as practicable after its receipt.

(4) Where under this regulation the Operator transfers entitlements from one controller to another, any instructions received by the first mentioned controller with regard to those entitlements prior to the transfer which have not been acted upon at the time of transfer may (and in the case of instructions received under regulation 34 shall) be treated as instructions received by the other controller, to the extent that satisfactory evidence of them is obtained by the other controller and the other controller is satisfied that he or it has established the number of entitlements to be held for the account holder concerned. Where the other controller has reason to believe that an entitlement transferred is or may be one to which regulation 34, 5 1, 52 or 53 applies, it shall take reasonable steps to ascertain whether or not the entitlement is subject to the regulation in question.

(5) The Operator may treat consents and notifications of transactions with respect to an entitlement given by a replaced controller before the transfer as being given on behalf of the replacement controller. Where this paragraph is taken advantage of by the Operator, the replacement controller shall not be liable for any defect in, or lack of authority for, the giving of the consent or notification.

(6) A standing instruction to register given by a replaced controller shall be treated as having been given on behalf of the replacement controller; the replacement controller shall not, however, be liable for any defect in such an instruction to register solely by reason of the provisions of this paragraph.

(7) The Operator shall not effect a transfer under this regulation to any controller other than a primary company controller except with the consent of that controller and on such terms as may be agreed between them. Where that controller is a commercial controller, regulation 13(1), (2), (4) and (7) shall not apply until either there is an agreement, made for the purposes of regulation 13(1), between the account holder and the commercial controller, or (if sooner) until the expiry of 3 months from the date of receipt of the entitlements by the controller; the other pro-visions of that regulation shall apply, in particular regulation 13(3).

(8) Where the Operator effects a transfer under this regulation to a primary company controller it shall take all practicable steps, at its own expense (but without prejudice to its right to recover the cost from the controller from whom entitlements have been transferred) to provide complete and up to date records to the primary company controller and otherwise to ensure that the primary company controller is in a position to perform his or its functions under these Regulations.

(9) It shall be the duty of any replacement controller which has received any records, or copies of records, under this regulation, to permit their inspection and copying by any person who is an officer of the replaced controller or any insolvency practitioner who is appointed in relation to that controller or the official receiver.

Section 15 Approved persons

(1) The Operator may admit as a participant one or more persons to carry out the functions of an approved person under these Regulations. A person may be so admitted either generally or for a specified period of time or for specified purposes.

(2) It is the function of an approved person under these Regulations to be:

(a) the means whereby an instruction may be given by means of the Operator’s part of the system to a company controller on behalf of one of the controller’s account holders; and

(b) responsible for ensuring that no such instruction is given by such means unless the instruction has been authorised by the account holder on whose behalf it is purportedly given (where two or more persons acting together are the account holder, by each of them).

(3) Without prejudice to regulation 57, it is the duty of an approved person not to communicate an instruction to a company controller on behalf of an account holder of that controller unless the approved person has authority from the account holder (in the case of persons acting jointly, from each of them) to do so.

Section 16 The appropriate register

(1) A company shall record the names of holders of units of an uncertificated security of the company on the appropriate register, giving the particulars required by any applicable enactment and the terms of issue of the security (subject to paragraph (2)).

(2) Schedule 2 to these Regulations has effect so as to modify or exclude the provisions of certain provisions of the 1985 Act with respect to the keeping of a register of members and a register of debenture holders.

Section 17 Evidential value of the appropriate register

The appropriate register for an uncertificated security shall be (if it would not otherwise be) prima facie evidence, and in Scotland sufficient evidence unless the contrary is shown, that a person registered in it as the holder of a unit of an uncertificated security has the title to that unit.

Section 18 Transfers to be only in accordance with Regulations

(1) Subject to the provisions of any enactment or rule of law by or under which the title to a unit of a security is or may be transferred or transmitted to, or devolve on, a person or persons by operation of law, any purported transfer of the title to a unit of an uncertiticated security other than in accordance with these Regulations shall be of no effect.

(2) Subject as aforesaid, this regulation has (without prejudice to regulation 48) effect notwithstanding the provisions of any enactment or instrument or of any rule of law; in particular:

(a) sections 182(1)(b) and 183 of the 1985 Act shall not be applicable to shares in uncertiticated form;

(b) section 53(1)(c) of the Law of Property Act 1925 shall not apply (if it would otherwise do so) to the transfer of the title to an uncertificated security; and

(c) section 136 of the Law of Property Act 1925 shall not apply (if it would otherwise do so) to the transfer of the title to an uncertiticated security.

Section 19 Transfer of title

Subject to an enactment or an Order of a court to which regulation 53 applies, the title to a unit of an uncertificated security is transferred:

(a) from one person to another by the registration of that other as the holder of the unit in the appropriate register in response to a proper instruction to register; or

(b) from a person to a controller’s default nominee as a result of the company registering, under these Regulations, the nominee as holder of the unit,

notwithstanding that the transferor of the unit may not be identified in the instruction or is otherwise unidentifiable as such by the company.

Section 20 Definition of a proper instruction to register

(1) For the purposes of these Regulations a proper instruction to register is an instruction issued by a controller holding, at the appropriate date, the entitlement to a unit of a security to register a specified person as the holder of that unit which conveys, either itself or when read with any associated information held by the company, the relevant particulars of that person.

(2) A proper instruction to register may either be:

(a) standing, that is to say the person specified in it is to be registered at each periodic update of the appropriate register as the holder of the units specified in the instruction; or

(b) limited, that is to say the person specified in it is to be registered in the appropriate register as the holder of the units specified in the instruction until the next periodic update of the appropriate register.

(3) For the purpose of paragraph (I), the relevant particulars are:

(a) the name and address of the person to be registered as holder or, in the case of joint holders, the name and address of the person to be registered as the first holder together with the names of the other persons to be registered as holders;

(b) the security and the number of units in,respect of which registration is to be effected;

(c) any other particulars required (in the case of shares) by the memorandum and articles of the company concerned or (in the case of any security) by the terms of issue of the security governing the registration of holders of units of the security; and

(d) the identity of the issuing controller.

(4) For the purposes of this regulation, the “appropriate date” is:

(a) in the case of a periodic update of the appropriate register, the date by reference to which the register is to be updated;

(b) in the case of a proper instruction to register referred to in regulation 42 (Transfers where transferor identified):

(i) where the instruction is in respect of a controller’s default nominee registered in that capacity, the date by reference to which the default nominee was registered; and

(ii) in any other case, the date by reference to which the proper instruction was issued.

Section 21 Execution of instructions to register by a company

(1) It is the duty of a company to execute, in accordance with these Regulations, a proper instruction to register at the occasion of each periodic update of the appropriate register under regulation 41, unless paragraph (2) applies.

(2) A company shall refuse to register a person as the holder of a unit of an uncertificated security in response to a proper instruction to register if required so to do by or under any enactment and may so refuse:

(a) where the directors (or the company) are given express powers (in the case of shares) under the memorandum and articles of association of the company, or (in the case of any security) by the terms of issue of the security, to refuse to register the person in question as the holder of the unit of the security; and

(b) where the directors would have had power to refuse the registration of the person as the holder of a unit of a certificated security of the same kind.

(3) No notice shall be receivable by the company (other than from the issuing controller) that any particular conveyed by a proper instruction to register (together with any relevant associated information held by the company) is erroneous, given in breach of the con-troller’s duties under these Regulations or otherwise not in accordance with the controller’s instructions or authority to act.

Section 22 Entitlement to a unit of a security

(1) With respect to each unit of an uncertificated security there shall be a power, which may only be held and exercised by a controller, to instruct the registration of a person as the holder of the unit on the appropriate register; this power is known in these Regulations as the “entitlement” to the unit.

(2) Whether or not a controller has an entitlement to a unit of a security is determined by whether the controller is recorded on a record of entitlements as having such an entitlement, save that where, and for as long as, the sum of the entitlements on the Operator’s and company’s records of entitlements exceeds the units of a security in issue, the question of whether the controller has the entitlement is in addition to be determined by ascertaining whether the controller would have been recorded with it if the excess had not arisen.

Section 23 Entitlement as an interest in shares for the purposes of the 1985 Act

(1) An entitlement shall not be an interest in a share for any purpose of the following provisions of the 1985 Act:

(a) Part VI; and

(b) sections 324 to 326, 328 and 346, together with Schedule 13.

(2) This regulation is without prejudice to the provisions of paragraph 1 of Schedule 8 to these Regulations (which provides that an account holder for whom an entitlement to a share is held has an interest in the share concerned inter alia for the purposes of Part VI of the 1985 Act).

Section 24 The Operator’s record of entitlements

(1) It is the duty of the Operator to establish and maintain a record of holders of entitlements to units of each security which it admits into the system.

(2) The Operator shall enter into the Operator’s record of entitlements for a security the name of each commercial and alternative company controller holding an entitlement to a unit of the security concerned, together with the number of entitlements held by that controller.

(3) It is the duty of the Operator, in respect of each record of entitlements maintained by it, to transmit to the company concerned, by means of the Operator’s part of the system, the identity of, and number of entitlements held by, each controller recorded on the record at an identified point of time on each working day, at the latest by the end of the next working day.

Section 25 Company’s record of entitlements

(1) It is the duty of every company having in issue an uncertificated security to establish and maintain a record of holders of entitlements to units of the security concerned.

(2) The company shall enter into the company’s record of etitlements for a particular security the name of each primary company controller holding an entitlement to a unit of the security concerned, together with the number of entitlements held by that controller.

Section 26 Location and inspection of records of entitlements

(1) Section 353(1), (2) and (4) of the 1985 Act (Location of register) shall apply with respect to a company’s record of entitlements as it applies with respect to a company’s register of members maintained under that Act. The information with respect to the Operator’s record of entitlements received by the company under regulation 24(3) for a day shall be kept until the company has received information in respect of a subsequent day and shall be kept by the company at the same place as the company’s record of entitlements; section 353(4) of the 1985 Act shall apply with any necessary modifications.

(2) Section 356 of the 1985 Act (Inspection of register and index) shall apply to a company’s record of entitlements and the information with respect to the Operator’s record of entitlements received by the company under regulation 24(3), for the period during which the company is required to keep that information under paragraph (1) above, as it applies to a company’s register of members maintained under that Act; section 723A of the 1985 Act shall apply, with any necessary modifications for the purposes of section 356 as applied by this paragraph as it applies generally for the purposes of section 356.

(3) Where, pursuant to section 353(1)(b) of the 1985 Act as applied by paragraph (1), a company’s record of entitlements or the information with respect to the Operator’s record of entitlements received by the company under regulation 24(3) is kept at the office of some person other than the company, and by reason of any default of that person the company fails to comply with section 353(2) or 356 of that Act as applied by this regulation, section 357 of that Act shall apply so as to make that person liable to the same penalties as if the person were an officer of the company in default and so as to extend the power of the Court under section 356(6) (as so applied) to the making of Orders against that person.

Section 27 Account holders

(1) As between a controller and his or its account holders, each entitlement held by the controller shall be expressly allocated by the controller as being exercisable for the benefit of the account holder for whom the entitlement is held by noting that the entitlement is held for that account holder in the controller’s record of account holders for the security. Notwithstanding that there has been a failure to make such an express allocation, an entitlement held by the controller for an account holder shall remain held for that account holder.

(2) However as against any other person (including the Operator, any other controller and the company issuing the security) all entitlements to units of a security held by a controller shall be treated as being held in a single undivided pool and (save as otherwise provided under these Regulations) no notice is receivable by any such person that a particular entitlement is or was held for a particular person. Accordingly no notice is to be receivable by any other person that a transfer of an entitlement is being or has been effected without the instructions or authority of the account holder with respect to that entitlement.

(3) It is the duty of a controller, in issuing a proper instruction to register with respect to an entitlement, to instruct the registration of the account holder for whom it is held as the holder of the unit of a security concerned.

(4) This regulation is subject to regulation 53(5).

Section 28 Controller’s record of account holders

(1) It is the duty of a controller to establish and maintain at least one record of his or its account holders with respect to a security. A controller may establish more than one record with respect to a security, splitting the entitlements held by him or it in the security between the records.

(2) A controller shall note on a record of account holders maintained by him or it with respect to a security:

(a) the name and address of each of his or its account holders with respect to that security (in the case of persons acting jointly who are together treated as an account holder, the names of each such person together with the address of the first named); and

(b) the number of entitlements to units of the security held by him or it for the account holder.

(3) Where a commercial controller, under paragraph (1), maintains more than one record of account holders for a security, the Operator may treat the entitlements, for the purposes of the system, as being held by separate controllers; in such a case these Regulations (other than regulation 29) shall apply as if the controller was a separate person acting as a commercial controller with respect to the entitlements so treated as being held by separate controllers.

(4) A record of account holders maintained by a controller shall be prima facie evidence, and in Scotland sufficient evidence unless the contrary is shown, that entitlements recorded as being held for a person are in fact held for that person.

Section 29 Insufficiency of entitlements

(1) If at any time:

(a) a controller holds less entitlements to a particular security than he or it ought to be holding if he or it had properly carried out his or its functions under these Regulations or (in the case of a commercial controller) under any agreement entered into for the purposes of regulation 13(1);

(b) it is not reasonably practicable to identify and rectify the reason for the deficiency or the deficiency is not otherwise remedied by the controller; and

(c) it is necessary for any purpose to determine for whom the controller should hold the entitlements to the security,

paragraphs (2) to (4) shall have effect.

(2) If at the time the question falls to be determined the controller concerned holds any relevant entitlements for an account holder, those entitlements shall be held by the controller, to the extent necessary to remedy the shortfall, for the account holders of the controller, other than any person for whom a relevant entitlement is held, with respect to the security concerned. For this purpose a relevant entitlement is an entitlement to the security concerned held by the controller, being a body corporate:

(a) for:

(i) itself or

(ii) a member of a group (within the meaning of section 262 of the 1985 Act) of which it is a member where it or such a member is acting with respect to the unit of a security concerned as principal or as trustee (directly or indirectly) for persons who are all members of such a group; or

(b) for any other person:

(i) acting as a nominee with regard to the unit of a security concerned for the controller or a member of a group (within the meaning of section 262 of the 1985 Act) of which the controller is a member where the controller or such a group member is acting with respect to the unit of a security concerned as principal or as trustee (directly or indirectly) for persons who are all members of such a group, or

(ii) acting as trustee (directly or indirectly) for persons who are all members of such a group;

regulation 28(3) shall not apply.

Where the controller is a partnership, for the purposes of this paragraph a relevant entitlement is an entitlement to a unit of the security concerned held by the partnership for a partner or for any person who is a person connected with the partner within the meaning of section 346 of the 1985 Act (taking references therein to a director of a company as references to the partner), where the partner or that person is acting with respect to the unit of a security concerned as principal or as trustee (directly or indirectly) for persons who are partners or persons who are all such connected persons with respect to partners or for partners and such persons; regulation 28(3) shall not apply.

Where the controller is an individual, for the purposes of this paragraph a relevant entitlement is an entitlement to a unit of the security concerned held by him for himself or for any person who is a person connected with him within the meaning of section 346 of the 1985 Act (taking references therein to a director of a company as references to the individual), where he or that person is acting with respect to the unit of a security concerned as principal or as trustee (directly or indirectly) for the controller or persons who are all such connected persons or for the controller and such persons; regulation 28(3) shall not apply.

(3) Otherwise (if, but only if, there remains at the time the question falls to be deter-mined a shortfall of entitlements after the application of paragraph (2)) the entitlements shall be held for the account holders (other than any person for whom a relevant entitlement was held) in proportion to the entitlements which ought to be held for them by the controller.

(4) This regulation is without prejudice to any liability the controller may have incurred as a consequence of any breach of his or its duties and applies notwithstanding any entries on a controller’s record of account holders.

(5) Paragraphs (2) to (4) shall also apply where a controller receives entitlements from another controller as a result of a transfer under regulation 12 and Schedule 1 or regulation 14 and:

(a) that other controller, in relation to the entitlements transferred, held less entitlements to a particular security than he or it ought to have been holding if he or it had properly carried out his or its functions under these Regulations; and

(b) it is not reasonably practicable to identify and rectify the reason for the deficiency;

for the purpose of establishing the persons for whom the entitlements are to be held by the controller.

They shall apply with any necessary modifications and as if the question for whom the entitlements transferred were held had fallen to be determined by the other controller immediately prior to the transfer.

Section 30 Transfer of entitlement

(1) Subject to paragraph (2), an entitlement is transferred from one controller to another by the entry of the transferee of the entitlement as its holder in a record of entitlements.

The corresponding amendment of the entry in respect of the transferor is not required to effect the transfer, but the Operator or (as the case may be) the company shall debit the transferor with the entitlement.

(2) Where an entitlement is to be transferred from a primary company controller to a commercial (or alternative company) controller, or vice versa, transfer of the entitlement is effected by the crediting of the transferee, or (as the case may be) the debiting of the transferor, with the entitlement on the Operator’s record of entitlements; the corresponding amendment to the company’s record of entitlements not being required to effect the transfer.

It is however the duty of the company, having been notified of a transfer of an entitlement to or from a primary company controller, to amend its record of entitlements so as to reflect the transfer.

(3) Subject to these Regulations, it is the duty of (in the case of the Operator’s record of entitlements) the Operator or (in the case of the company’s record of entitlements) the company to effect a transfer of an entitlement if, but only if:

(a) it is in receipt of a notification of a transaction with respect to the entitlement (and, if the notification has been given on conditions, those conditions have been satisfied); and

(b) the transferor and (unless a primary company controller) the proposed transferee of the entitlement have consented to the transfer

(and, if the consent has been given on conditions, those conditions have been satisfied), (no consent as transferee being required from a primary company controller).

Section 31 Notifications of transactions

(1) A notification of a transaction must be received by the Operator unless the entitlements are to be transferred between primary company controllers only.

(2) For the purposes of these Regulations a notification of a transaction to the Operator is such notification of a proposed transfer of an entitlement, which is contained in such message or combination of messages from such person or persons and issued in such circumstances as the Operator recognises as a notification of a transaction under the Operator’s part of the system.

(3) For the purposes of these Regulations, a notification of a transaction to the company is an instruction to effect the transfer of an entitlement, which is contained in a message issued by a primary company controller specifying the requisite particulars.

(4) For the purposes of paragraph (3), the requisite particulars are:

(a) the name and address of the account holder (or where persons acting jointly are together the account holder, the names of each account holder and the address of the first named) on behalf of whom the transferee is to hold the entitlement;

(b) the security concerned; and

(c) the number of entitlements to be transferred.

Section 32 Consent to transfers of entitlements by controllers

(1) It is the duty of a controller to consent to the transfer of an entitlement as transferor if, but only if:

(a) when requested to give his or its consent under the Operator’s part of the system, he or it knows the total number of entitlements he or it is being requested to consent to the transfer of and the identity of the uncertificated security concerned;

(b) when requested to give his or its consent under the Operator’s part of the system, he or it knows the identity of the account holder in relation to whom he or it is being requested to give consent;

(c) (in the case of a company controller) he or it is in receipt of an instruction from the account holder for whom the entitlement to be transferred is held to consent to the transfer;

(d) (in the case of a commercial controller) he or it is authorised (where required, by an instruction) by the account holder to consent to the transfer of the entitlement; and

(e) he or it holds an entitlement for the account holder, which he or it has not previously consented to the transfer of and which is not the subject of an instruction under regulation 33.

This paragraph is without prejudice to the provisions of Chapters II to IV of Part VI of these Regulations.

(2) In addition a company controller shall not consent to a transfer of an entitlement if, being requested to consent to the transfer of a number of entitlements by a communication by means of the Operator’s part of the system, he or it cannot satisfy in full the request.

(3) Subject to regulation 14(7) it is the duty of a commercial or alternative company controller to consent to a transfer of an entitlement as transferee if, but only if:

(a) when requested to give his or its consent under.the Operator’s part of the system, he or it knows the identity of the person for whom the entitlement is to be held;

(b) he or it is authorised to hold the entitlement for that person; and

(c) when requested to give his or its consent under the Operator’s part of the system, he or it knows the number of entitlements he or it is being asked to consent to the transfer of and the identity of the uncertificated security concerned.

Section 33 Instruction to controller to hold for another

(1) An account holder, for whom a controller holds an entitlement, may instruct the controller to hold the entitlement for another specified person in place of the account holder, provided the instruction sets out the requisite particulars.

For this purpose the requisite particulars are:

(a) the name and address of the account holder (in the case of persons acting jointly who are together an account holder, the name and address of each of them);

(b) the name and address of the person on whose behalf the controller is to hold the entitlement for the future (in the case of persons acting jointly who are together to be the account holder, the name of each of them and the address of the person first named in the instruction);

(c) the security concerned; and

(d) the number of entitlements concerned.

(2) In the case of a commercial controller, paragraph (1) is subject to any agreement between the controller and his or its account holder.

(3) It is the duty of a controller to give effect to an instruction received under this regulation by expressly re-allocating the entitlement as being held for the person specified by amending his or its record of account holders accordingly, provided that:

(a) the controller holds sufficient entitlements to units of the security for the instructing account holder, which he or it has not previously consented to the transfer of and which have not been the subject of instructions under this regulation, to enable him or it to comply in full with the instruction; and

(b) he or it has authority to hold the entitlements for the person specified.

This paragraph is without prejudice to the provisions of Chapters II to IV of Part VI of these Regulations.

(4) Upon a controller entering, under paragraph (3), the name of a person into a record of account holders as the person for whom an entitlement is held, the controller shall thereupon hold the entitlement for that person (who accordingly is thereupon the account holder with respect to the entitlement) in place of the person giving the instruction, notwithstanding that the controller may have neglected to make the corresponding amendment to the entry of the latter.

(5) In the case of one among two or more primary company controllers or an alternative company controller, if the controller, having received an instruction under this regulation, is not able to give effect to the instruction solely because he or it has no authority to hold entitlements for any person specified, he or it shall notify a transaction to (in the case of a primary company controller) the company or (in the case of an alternative company controller) the Operator for the entitlement or entitlements concerned to be transferred to a primary company controller which is so authorised and instruct that controller to hold the entitlement for the person specified.

Section 34 Conditional instructions by way of security (England and Wales and Northern Ireland)

(1) This regulation shall have effect so as to facilitate the giving of a security interest over units of a security under the law of England and Wales or Northern Ireland.

(2) Without prejudice to any other circumstances in which a conditional instruction may be issued to a controller, an account holder may, in order to give security for any obligation, issue an instruction to a controller to hold an entitlement for another person (which may be the controller) under regulation 33(1) on terms that the instruction:

(a) is conditional upon being confirmed by the person specified in the instruction; and

(b) is to cease to have effect if that person cancels it but is otherwise irrevocable as between the controller and the account holder.

(3) A controller shall acknowledge the receipt of such an instruction to the account holder and the person specified in the instruction, giving the date of its receipt.

(4) Where a commercial controller has received such an instruction but the instruction has not yet been confirmed or cancelled, the controller shall not issue any communication on behalf of the account holder to the company or any other person in repsect of the entitlements subject to the instruction unless he or it has given 10 working days prior notice to the person specified in the instruction.

(5) A commercial controller:

(a) may agree with an account holder that he or it will not receive instructions under this regulation; and

(b) shall not accept an instruction under this regulation unless he or it is authorised to hold any entitlemenmt concerned.

This regulation is also subject to any agreement between such a controller, an account holder of that controller giving an instruction under this regulation and any person specified in the instruction.

(6) An instruction given under paragraph (1) shall be regarded, for the purposes of any provision of these Regulations, as being an instruction under regulation 33(1), notwithstanding its conditional nature.

A person giving such an instruction shall be regarded as the account holder with respect to any entitlement concerned until the insruction has been confirmed and acted upon.

Section 35 Controller’s duty to issue proper instructions

(1) If a controller held, or holds, an entitlement to a unit of a security at a date:

(a) being a fixed register date of the company concerned; or

(b) specified in a general call for instructions,

it is his or its duty to issue a proper instruction to register with respect to the entitlement (unless there was, or (as the case may be) is, a standing instruction extant with respect to the entitlement to which regulation 36(1) does not apply).

(2) Where a controller has failed to issue a proper instruction to register with respect to any entitlement for a periodic update of the appropriate register, the company shall register the controller’s default nominee as holder of the unit to which the entitlement relates.

Having registered a default nominee under this paragraph, the company shall notify the controller concerned of the registration as soon as reasonably practicable.

Section 36 Controller’s duty to cancel standing instructions to register or transfer

(1) Where a contgroller has issued a standing instruction to register a person as holder of a unit of an uncertificated security, it is his or its duty to notify the company if the entitlement concerned ceases to be held by him or it for that person.

(2) Such a notification shall be issued as soon as reasonably practicable after the entitlement is no longer so held.

(3) Upon receipt of such a notification, the company shall treat the standing instruction as no longer extant or, where the standing instruction relates to other entitlements not covered by the notification, as no longer extant to the extent of the entitlements covered by the notification.

Section 37 Multiple instructions by controllers

(1) Subject to the provisions of this regulation, a company shall not register a person as holding a unit of any uncertificated security in response to a proper instruction to register if the controller which has issued the instruction has, for the purposes of the periodic update of the register in question, purportedly issued such instructions with respect to more units of the security than there were entitlements held by that controller in respect of the security on the date by reference to which the register is to be updated.

(2) However before a company may refuse to register a person under paragraph (1) it must first have taken such steps as are reasonably practicable, if any, to call (in the case of a commercial or alternative company controller by means of a valid communication) for further proper instructions to register with respect to the entitlements held by that controller on the date by reference to which the register is to be updated.

Section 38 Consequences of refusal of registration

(1) Where a company refuses for any reason to register on the appropriate register a person as a holder of a unit of an uncertificated security in response to a proper instruction to register, it shall instead register, as the holder, the default nominee of the controller that issued the proper instruction to register that person.

(2) Having registered a default nominee under this regulation, the company shall notify the controller concerned of the registration as soon as reasonably practicable.

Section 39 Amendment of particulars

(1) A controller shall, by issuing an instruction to a company, amend the particulars set out in any proper instruction to register issued by him or it with respect to the name or address of the person registered or to be registered as holder if it is provided with appropriate evidence that there has been a change of the holder’s name or address.

(2) A company may amend the appropriate register so as to reflect an instruction amended under this regulation other than at a periodic update of the register, if the instruction amended has already been acted upon.

(3) A company need not give effect to an instruction as amended under this regulation if the amending instruction is received so close to a periodic update of the register that it is not reasonably practicable to have regard to it.

Section 40 Company to inform persons of controllers holding entitlements

Where an application is made in writing to a company by any person who provides satisfactory evidence that, by reason of proceedings (whether administrative or judicial) in contemplation or being taken with respect to a unit of a security of the company registered in the name of a specified holder, the person has reason to know the name and address of the controller that has instructed the registration of the holder, the company shall provide that information to the applicant as soon as reasonably practicable, together (where the contgroller is a company controller) with any address for service on that controller set out in the list maintained under regulation 9.

Section 41 Maintenance of the appropriate register

(1) A company having in issue an uncertificated security shall maintain the appropriate register for that security in accordance with the provisions of this Chaptger of this Part of these Regulations.

(2) The appropriate register for an uncertificated security shall be made up periodically and not, subject to regulations 39, 42, 72, 73 and 78, continuously.

Accordingly, subject to those regulations, no proper instruction to register received by a company may be given effect to other than at a periodic update of the appropriate register.

(3) A periodic update of an appropriate register for an uncertificated security shall be carried out:

(a) after each general call for instructions; and

(b) after each fixed register date of the company.

In each case the register shall be made up from the proper instructions to register the company has received in response to the general call or with respect to the fixed register date, together with any standing instructions that are extant.

(4) A periodic update of an appropriate register for an uncertificated security shall take the form of the preparation of a new version of the register; the new version shall supersede the old version of the register with effect from the completion of the update (and not with effect from any earlier date).

(5) Notwithstanding the provisions of any other regulation, a company shall not update an appropriate register under this regulation unless, at the date by reference to which the register is to be updated, the sum of the entitlements recorded on the operator’s and company’s records of entitlements reconciled with the total number of units of the relevant security then in issue or the records have been made to so reconcile as at that date by their amendment under regulations 72 and 73.

Section 42 Transfer where transferor identified

(1) Notwithstanding regulation 41, a company may amend the appropriate register for an uncertificated security other than at a periodic update if it is in receipt of a proper instruction to register in respect of a unit of the security which in addition identifies the person currently registered as holder of the unit concerned.

(2) However no such instruction may be acted upon by the company unless it has been issued by the same controller as issued the instruction to register the current holder.

(3) Subject to regulation 21(2), a company shall so amend the register if it is in receipt of such an instruction and the registered holder concerned is the default nominee of the instructing controller registered in that capacity; such an amendment is to be made as soon as is reasonably practicable after receipt of the instruction.

Section 43 Register events

(1) Where:

(a) the appropriate register for an uncertificated security is to be utilised to determine a matter listed in Schedule 3 to these Regulations against a security of the kind in qustion; and

(b) that matter is to be determined by reference to the appropriate register as it stands on a specified date,

it is the duty of the company (or, as the case may be, the directors of the company), if practicable, to use for the purpose a version of the appropriate register that has been updated by reference to a date not more than 5 days prior to the specified date.

(2) The use of the appropriate register to determine a matter listed in Schedule 3 in circumstances where paragraph (1) applies is known in these regulations as“a register event”.

Section 44 Fixed register dates

(1) There shall be, for every uncertificated security, at least one day in every period of five weeks by reference to which the appropriate register for that security is to be updated under these Regulations, known in these Regulations as a“fixed register date”.

(2) The fixed register dates for a security shall be agreed for each period of six calendar months between the Operator and the company concerned (or, failing such agreement assigned by the Operator to the company), at least 5 working days in advance of the start of the period.

(3) The fixed register dates so agreed or assigned for a period shall be published by the comapny in such form as the company reasonably considers is calculated to bring the dates to the notice of those persons likely to be interested in them.

(4) Notwithstanding that a fixed register date has been so agreed or assigned, that date shall be treated as cancelled if the company has issued a general call for instructions by reference to a date within 5 working days either side of the fixed register date and notifies the Operator, prior to receiving proper instructions to register with respect to the fixed register date, that it does not wish to receive such instructions.

Section 45 General calls for instructions

(1) A company may issue at any time a general call for instructions specifying a date by reference to which it proposes to update the appropriate register for a security.

A date specified in a general call shall be a date prior to the date on which the general call is issued, but may not be a date prior to the last date by reference to which the appropriate register was updated.

(2) The general call shall be issued:

(a) to each commercial and alternative company controller which held entitlements on the date specified (other than a controller which issues only standing instructions to register), by means of the Operator’s part of the system; and

(b) to each primary company controller, in such form as may be agreed between the company and the controller or, failing such agreement, in writing.

Section 46 Right of controllers to trigger general call for instructions

(1) A company shall, having received a requisition by one or more controllers under this regulation, forthwith issue a general call for instructions with respect to a security.

(2) A requisition under this regulation may be given by one or more controllers provided that in doing so they rely upon entitlements held by them amounting in number, at the date the requisition is made, to one tenth or more of the units of the security in question than in issue.

(3) It is the duty of a controller to make, or join in, a requisition under this regulation in reliance on an entitlement held by him or it if, but only if, he or it has been instructed to do so by the account holder for whom the entitlement is held.

(4) A requisition under this regulation must be signed by each of the requisitionists by a person authorised by him or it to do so, and is made when deposited at the company’s registered office.

Section 47 Commencement of winding up

(1) This regulation applies from the commencement of the winding up, within the meaning of the Insolvency Act 1986, of a company which has in issue an uncertificated security and for as long as any winding up proceedings under that Act may subsist.

(2) An appropriate register for an uncertificated security of the company may only be updated (whether periodically or otherwise), or otherwise amended, with (in the case of a voluntary liquidation) the consent of the liquidator of the company or (in the case of a compulsory winding up) the court seised of the winding up proceedings in relation to the company.

Where an appropriate register has been updated or amended without such consent, the update shall be void save and to the extent it is ratified by (in the case of a voluntary liquidation) the liquidator or (in the case of a compulsory winding up) the court seised of the winding up proceedings in relation to the company.

(3) Regulations 43 to 46 shall not apply.

Section 48 Exclusion of enactments and rule of law

(1) A company shall not be under any obligation (if it otherwise would be) to issue any certificate evidencing the title to a unit of an uncertificated security of the company and in particular section 185 of the 1985 Act shall not apply to a company to the extent that it has uncertificated shares.

(2) Subject to paragraph 4 of Schedule 5 to these Regulations, any certificate issued by or on behalf of a company purportedly evidencing the title to a unit of an uncertificated security of the company shall not be (if it woud otherwise be) prmia facie evidence, and in Scotland sufficient evidence unless the contrary is shown, of the title to the unit and in particular section 186 of the 1985 Act shall not have effect in relation to any certificate issued with respect to uncertificated shares.

(3) No rule of law to the effect that, in a contract to transfer the title to units of a security, it is a term that the transferor shall execute and deliver to the transferee a proper instrument of transfer and a certificate evidencing the rights and interests liable to be conveyed (or obtain a certification of the transfer from any person) shall apply with respect to units of an uncertificated security.

Section 49 Implied terms in contracts for the transfer of uncertificated securities

(1) It is an implied term in a contract for the transfer of a unit of an uncertificated security that:

(a) any authority, instructions or notifications of transactions necessary for the effecting of the transfer will be given by the transferor or by persons acting on behalf of the transferor; and

(b) the controller to hold any entitlements concerned for the transferee is to be a company controller.

(2) A term implied into a contract by this regulation may be excluded or varied expressly or, where the contract makes alternative provision, impliedly.

For this purpose a contract may make alternative provision expressly or by implication.

Section 50 Trustees holding units of an uncertificated security

(1) A provision in any instrument or enactment which authorises:

(a) the holding and investment of trust property in units of a security; or

(b) the variation of investments in units of a security comprising trust property,

shall be deemed to authorise investment of trust property in units of any uncertificated security which, if the security had been in certificated form, would have been an authorised investment for the purposes of the provision or rule of law.

(2) Paragraph (1) shall be without prejudice to:

(a) any other condition which is imposed by the instrument, enactment or rule of law relating to the investment of trust property in units of a security; and

(b) any express provision of any instrument which prohibits the investment of trust property in units of an uncertificated security.

(3) Any provision of any instrument or enactment or any rule of law relating to the employment of agents by trustees shall not be taken as precluding the holding of, or investment of trust property in, units of an uncertificated security by virtue only of the reason that the power to transfer the units is under these Regulations held for the trustees by a controller and a trustee shall not be answerable for the insufficiency or deficiency of any securities or any income threrfrom, or for any other loss due to the acts, neglects or defaults of the controller unless the same happens through the trustee’s own wilful default or neclect.

(4) For the purpose of this regulation“trustee” (in England and Wales and Northern Ireland) shall include a personal representative and any other person acting in a fiduciary capacity and (in Scotland) any person who is a trustee for the purposes of the Trusts (Scotland) Act 1921 and“trust peropery” shall include all property held by persons acting in such capacities.