The Banking Act 1987 (Exempt Transactions) (Amendment) Regulations 1989

Explanatory Note

(This note is not part of the Regulations.)

These Regulations amend the Banking Act 1987 (Exempt Transactions) Regulations 1988.

First they make changes to the exemption for sterling commercial paper. The main changes are as follows. The classes of person who can accept deposits under the exemption are widened to include companies whose shares or debt are traded on the Unlisted Securities Market, other unlisted UK companies, overseas companies whose shares or debt are listed on certain overseas stock exchanges and overseas governments and public authorities whose debt is traded on The Stock Exchange or on certain overseas exchanges. Others may also issue sterling commercial paper if the paper is guaranteed by an institution authorised under the Banking Act 1987 or by a company whose shares or debt are listed or traded on the Official List of The Stock Exchange or on the Unlisted Securities Market. The minimum net asset requirement (which does not apply to overseas governments and public authorities) is reduced from £50 million to £25 million. The minimum denomination of sterling commercial paper is reduced from £500,000 to £100,000. Unlisted UK companies (whose shares or debt are not traded on the Unlisted Securities Market) and companies whose shares or debt are listed or traded on overseas stock exchanges are required to disclose certain information set out in a new Schedule 3 to the Regulations.

Secondly they amend the list of public undertakings in Schedule 2, the main changes being the deletion of references to the British Steel Corporation and the insertion of references to London Regional Transport, the Post Office and successors to the electricity boards.