The Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations (No. 10) 2009

Prescribed circumstances for the purposes of sections 116 and 117

4.—(1) In the circumstances prescribed in this regulation, a charge to stamp duty or 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 issued or transferred, or agreed to be issued or 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 to a clearing participant or a nominee of a clearing participant,

(c) a clearing participant or a nominee of a clearing participant to EMCF or X-CLEAR, or to a nominee of either EMCF or X-CLEAR.

(d) a person other than a clearing participant to EMCF or X-CLEAR, or to a nominee of EMCF or X-CLEAR, 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 EMCF or X-CLEAR, or to a nominee of either EMCF or X-CLEAR, or

(e) X-CLEAR or EMCF, or a nominee of either X-CLEAR or EMCF to a clearing participant or a nominee of a clearing participant.

(f) X-CLEAR or a nominee of that clearing house to EMCF or a nominee of that clearing house.

(g) EMCF or a nominee of that clearing house to X-CLEAR or a nominee of that clearing house.

(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 X-CLEAR or EMCF 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 its capacity as such.