The Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations (No. 3) 2009

• Citation: S.I. 2009/397
• Sections: 5

Section 1 Citation and commencement

(1) These Regulations may be cited as the Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations (No. 3) 2009 and shall come into force on 23rd March 2009.

(2) These Regulations shall have effect—

(a) for the purposes of the charge to stamp duty, in relation to instruments executed on or after 23rd March 2009;

(b) for the purposes of the charge to stamp duty reserve tax—

(i) in the case of agreements to transfer traded securities which are not conditional, in relation to agreements made on or after 23rd March 2009;

(ii) in the case of agreements to transfer traded securities which are conditional, in relation to agreements where the condition is satisfied on or after that date.

Section 2 Interpretation

(1) In these Regulations—

“clearing participant” means a member of EuroCCP who as such is permitted by the Rules of EuroCCP to clear transactions made on the Facility for a traded security and who may or may not also be a participant in the Facility;

“client” means a person who gives instructions to a non-clearing firm for traded securities to be sold on the Facility;

“EuroCCP” means European Central Counterparty Limited, a company which is a recognised clearing house under the Financial Services and Markets Act 2000 ;

“NYSE Arca Europe” or “the Facility” means the multilateral trading facility operated by Euronext Amsterdam NV, a market operator which is permitted to operate a trading facility pursuant to the Directive ;

“nominee” means a person whose business is or includes holding traded securities as a nominee for EuroCCP acting in its capacity as a person providing clearing services in connection with a transaction made on the Facility, or as a nominee for a clearing participant (as the case may be);

“non-clearing firm” means a participant in the Facility other than a clearing participant;

“traded securities” means stocks and shares which are issued or raised by a body corporate but does not include stocks and shares issued by a body corporate not incorporated in the United Kingdom unless—

the stocks and shares are registered in a register kept in the United Kingdom by or on behalf of the body corporate; or

in the case of shares, they are paired, within the meaning of section 99(6A) of the Finance Act 1986 , with shares issued by a body corporate incorporated in the United Kingdom.

Section 3 Prescription of recognised investment exchanges and recognised clearing houses

For the purpose of sections 116 and 117 of the Finance Act 1991—

(a) NYSE Arca Europe is prescribed as a recognised investment exchange; and

(b) EuroCCP is prescribed as a recognised clearing house.

Section 4 Prescribed circumstances for the purposes of sections 116 and 117

(1) In the circumstances prescribed in this regulation, a charge to stamp duty and the charge to stamp duty reserve tax shall be treated as not arising.

(2) The circumstances prescribed are where, in connection with a transaction made on the Facility conditions A and B are met.

(3) Condition A is that traded securities of a particular kind are transferred, or agreed to be transferred, from—

(a) a clearing participant or a nominee of a clearing participant to another clearing participant or nominee,

(b) a non-clearing firm or its client (or a nominee of a non-clearing firm or of a client of a non-clearing firm) to a clearing participant or a nominee of a clearing participant,

(c) a clearing participant or a nominee of a clearing participant to EuroCCP or to a nominee of that clearing house,

(d) a person other than a clearing participant to EuroCCP or to a nominee of that clearing house, as a result of a failure by a clearing participant to fulfil his obligations in respect of the transaction concerned to transfer traded securities to EuroCCP or to a nominee of that clearing house, or

(e) EuroCCP or a nominee of that clearing house to a clearing participant or a nominee of a clearing participant.

(4) Condition B is that the person to whom those securities are agreed to be transferred under any of the agreements specified in paragraph (3) (“the relevant agreement”) is required on receipt of those securities to transfer traded securities under a matching agreement to another person or, in the case of an agreement falling within paragraph (3)(d), would have been so required if the failure referred to in that paragraph had not occurred.

(5) In paragraph (4)—

(a) a “matching agreement” means an agreement under which—

(i) the traded securities agreed to be transferred are of the same kind as the traded securities agreed to be transferred under the relevant agreement, and

(ii) the number and transfer price of the traded securities agreed to be transferred are identical to the number and transfer price of the traded securities agreed to be transferred under the relevant agreement;

(b) references to EuroCCP are references to that clearing house in its capacity as a person providing clearing services in connection with a transaction made on the Facility;

(c) references to a clearing participant are references to a clearing participant in his capacity as such.

Section 5 Consequential provision

(1) Traded securities which are the subject of an agreement specified in regulation 4(3) shall be dealt with by a clearing participant who is party to the agreement in a separate designated account, and not otherwise.

(2) In paragraph (1) “designated account” means an account designated by EuroCCP for a clearing participant in connection with the traded securities concerned.