Finance Act 1977

58 Exchange control

(1) In subsection (3) of section 30 of the Exchange Control Act 1947 (which restricts the making of loans of money or securities to bodies corporate which are resident in the scheduled territories but controlled by persons not so resident) for the words " any money, securities " there shall be substituted the words " any money or securities or any instrument to which subsection (3 A) of this section applies ".

(2) After subsection (3) of the said section 30 there shall be inserted—

“(3A) Except with the permission of the Treasury, no body corporate resident in the scheduled territories which is by any means controlled (whether directly or indirectly) by persons resident outside the scheduled territories shall in the United Kingdom, and no body corporate resident in the United Kingdom which is so controlled shall outside the United Kingdom, issue, negotiate, transfer, renew or otherwise deal with any instrument to which this subsection applies; but a contravention of this subsection shall not affect the validity of any instrument or the rights of the parties to any transaction.

(3B) Subsection (3A) of this section does not apply to a banknote but, with that exception, applies to—

(a) any bill of exchange (including a cheque), promissory note, certificate of deposit or similar instrument;

(b) any other instrument which confers or evidences a right (whether conditional or unconditional) to be paid or to obtain, or to draw on any person for, a sum of money with or without interest, being a right capable of being transferred by delivery of the instrument with or without endorsement; and

(c) any instrument (not being an instrument within paragraph (a) or (b) above) of a description which is for the time being prescribed for the purposes of this subsection,

including any such instrument as aforesaid which is governed by the law of a country outside the United Kingdom.”

(3) In section 42(1) of the said Act of 1947 (interpretation) for the definition of " securities " there shall be substituted the following definition (which incorporates the effect of section 55(1) of the [1968 c. 44.] Finance Act 1968)—

• “' securities ' means—

  (a)

  shares, stock, bonds, notes (other than promissory notes), debentures, debenture stock, units under a unit trust scheme and shares in an oil royalty;

  (b)

  certificates of deposit;

  (c)

  Government bills ; and

  (d)

  any description of promissory notes which is for the time being prescribed for the purposes of this definition;”

and there shall be inserted at the appropriate points in alphabetical order the definitions of " certificate of deposit " and " Government bill" set out in section 55(3) of the said Act of 1968.

(4) In sections 21(1)(c) and 22(1)(b) of the said Act of 1947 (which restrict the import and export of certain instruments) after the words " Treasury bills " there shall be inserted the words (which reproduce the effect of section 55(2) of the said Act of 1968) ", Government bills, certificates of deposit or any description of promissory notes which is for the time being prescribed under paragraph (d) of the definition of ' securities' in section 42(1) of this Act ".

(5) Any amendment by this section of a provision which extends to the Channel Islands by virtue of any Order in Council under section 43(3) of the said Act of 1947 extends similarly; and, without prejudice to any further provision made by any such Order, section 30(3A) shall so extend with the substitution for references to the United Kingdom of references to the Channel Islands as defined in any such Order.

(6) Subsections (1) and (2) above, and so much of subsection (5) above as relates to those subsections, shall not come into force until such day as the Treasury may appoint by order made by statutory instrument.