The Uncertificated Securities (Amendment) (Eligible Debt Securities) Regulations 2003

29.  In regulation 7–

(a) for paragraphs (1) and (2), substitute–

“(1) Subject to paragraphs (4) and (7) below, a local authority may not issue units of a loan instrument which is an eligible debt security within paragraph (a) of the definition of “eligible debt security” in regulation 3(1) of the 2001 Regulations unless the issue of the units amounts to the issue of a bill, sterling commercial paper or a sterling medium term note in accordance with paragraph (2).

(2) For the purposes of these Regulations, the issue of units of a loan instrument amounts to–

(a) the issue of a bill if–

(i) the terms upon which the units are issued require that all payments to be made by the authority in respect of the units fall to be made not later than 187 days after the date of issue of the units; and

(ii) the issue of the units does not amount to the issue of sterling commercial paper or of a sterling medium term note in accordance with sub-paragraphs (b) or (c) below;

(b) the issue of sterling commercial paper if–

(i) the terms upon which the units are issued require that all payments which fall to be made by the authority in respect of the units are to be in sterling and to be made not earlier than seven days and not later than one year after the date of issue of the units; and

(ii) the requirements of paragraph (2A) below are satisfied;

(c) the issue of a sterling medium term note if–

(i) the terms upon which the units are issued require that all payments which fall to be made by the authority in respect of the units are to be in sterling and all such payments other than payments in respect of interest are to be made later than one year but not later than five years after the date of issue of the units; and

(ii) the requirements of paragraph (2A) below are satisfied.

(2A) The requirements of this paragraph are satisfied in relation to units of a loan instrument if the terms upon which the units are issued require that–

(a) the aggregate redemption value of the units at the date of issue is not less than £100,000; and

(b) the units are transferable only if their aggregate redemption value at the date of transfer is not less than £100,000.”;

(b) in paragraph (3)–

(i) for “paragraph (2)”, substitute “paragraph (2A)”;

(ii) for “loan instrument” substitute “units”;

(c) in paragraph (5), for “loan instrument is” (wherever occurring), substitute, “units are”;

(d) in paragraph (8)–

(i) a reference to paper includes a reference to units of a loan instrument where the issue of the units amounts to the issue of sterling commercial paper for the purposes of the 1990 Regulations; and

(ii) a reference to a note includes a reference to units of a loan instrument where the issue of the units amounts to the issue of a sterling medium term note for the purposes of the 1990 Regulations;

(e) in paragraph (9)–

(i) for the words from “Any” to “local authority shall”, substitute “The terms of a loan instrument, the issue of whose units amounts to the issue of sterling commercial paper or a sterling medium term note for the purposes of these Regulations shall”;

(ii) in subparagraph (b), for “under the instrument”, substitute “in respect of the units”;

(iii) in subparagraph (c), for “it is”, substitute “the issue of its units is equivalent to the issue of”;

(iv) omit subparagraph (d);

(v) in subparagraph (e), for “the instrument is”, substitute “units of the instrument are”;

(vi) after subparagraph (e), add–

“(f) include a term to the effect that the authority must, at the request of a person who holds units of the instrument, provide that person with a record (whether or not in the form of a document) containing the information referred to in subparagraphs (a) to (c) and (e) of this paragraph as applicable at the time the units were issued.”;

(f) after paragraph (10), insert–

“(10A) References in paragraphs (4) and (7) to (9) to, or to the issue of, a bill, sterling commercial paper or a sterling medium term note include references to, or to the issue of, units of a loaninstrument in circumstances where the issue of those units amounts to the issue of a bill, sterling commercial paper or a sterling medium term note (as the case may be) in accordance with paragraph (2).”.