The Banking Act 1987 (Exempt Transactions) (Amendment) Regulations 1990

Amendment of principal Regulations

3.  The principal Regulations shall be amended as follows:

(a) by substituting for regulation 1(2) the following paragraph–

“(2) In these Regulations, unless the context otherwise requires–

“the Act” means the Banking Act 1987;

“commercial paper” means a debt security which may not be redeemed in whole or in part until after seven days beginning with the date of issue but which must be redeemed within one year beginning with the date of issue;

“company” means a body corporate, including a body corporate constituted under the law of a country or territory outside the United Kingdom;

“the corresponding Northern Ireland legislation” means, in relation to any of the provisions of the Companies Act 1985(1) specified in these Regulations, the corresponding provisions of the Companies (North ern Ireland) Order 1986(2);

“the Council” means the Council of The Stock Exchange;

“debt security” includes bonds, notes, debentures and debenture stock;

“deposit”, except in the expressions “pre-contract deposit” and “deposit fund”, shall be construed in accordance with section 5 of the Act;

“exempt transactions” shall be construed in accordance with regulation 2 of these Regulations;

“financial year” has the meaning ascribed to it by section 742 of the Companies Act 1985;

“industrial and provident society” means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965(3) or under the Industrial and Provident Societies Act (Northern Ireland) 1969(4) but does not include a credit union within the meaning of the Credit Unions Act 1979(5) or the Credit Unions (Northern Ireland) Order 1985(6);

“the listing rules” means any rules made pursuant to section 142(6) of the Financial Services Act(7);

“medium term note” means a debt security which may not be redeemed in whole or in part until after one year beginning with the date of issue but which must be redeemed within five years beginning with the date of issue;

“net assets” has the meaning ascribed to it by section 264(2) of the Companies Act 1985;

“the Official List” means the Official List of The Stock Exchange;

“Recognised Overseas Exchange” means an exchange, market place or association for the time being included in the list published by the Council for the purposes of rule 535.4 of the Rules of The Stock Exchange (permitted dealings in foreign securities) or any rule of The Stock Exchange having substantially the same effect(8);

“redemption value”, in relation to any debt security, means the amount of the principal which is payable upon redemption of that security;

“relevant debt security” means a debt security which is commercial paper or a medium term note;

“The Stock Exchange” means The International Stock Exchange of the United Kingdom and Republic of Ireland Limited;

“subsidiary” and “wholly-owned subsidiary” shall be construed in accordance with section 736 of the Companies Act 1985(9);

“successor”, in relation to a body, means any company in which property, rights and liabilities of the body shall have become vested by virtue of an Act;

“the Unlisted Securities Market” means the Unlisted Securities Market of The Stock Exchange.”;

(b) in regulation 7(3)(a) by inserting after the words “of the other part” the words “(as amended by qualifying resolutions of Participating Societies (as therein defined) dated 29th May 1989)” and by inserting before the word “amended” the word “subsequently”;

(c) regulation 12 shall be revoked;

(d) by substituting for regulation 13 the following new regulation–

“Relevant debt securities

13.   The acceptance of a deposit by a person (not being a body listed in Schedule 2 to these Regulations) on terms involving the issue of any relevant debt security is an exempt transaction if

(a) the person accepting the deposit is–

(i) a company whose shares or debt securities have been admitted to the Official List (and are not the subject of a notice issued by the Council cancelling or suspending the listing or suspending dealings) or are dealt in on the Unlisted Securities Market (and are not the subject of a notice issued by the Council cancelling or suspending dealings); or

(ii) a company not falling within sub-paragraph (a)(i) above which is incorporated in the United Kingdom or whose shares or debt securities have been admitted to listing on a Recognised Overseas Exchange (and are not the subject of official action taken in accordance with the rules of the Recognised Overseas Exchange cancelling or suspending the listing or suspending dealings), which has complied with the requirements of Schedule 3 to these Regulations; or

(iii) the government of any country or territory, or a public authority, outside the United Kingdom the debt securities of which are admitted to trading on the Stock Exchange or on a Recognised Overseas Exchange (and are not the subject of a notice issued by the Council or official action taken in accordance with the rules of the Recognised Overseas Exchange (as the case may be) cancelling or suspending the admission to trading or suspending dealings); or

(iv) a person who does not fall within sub-paragraphs (a)(i) to (iii) above, if either a company which falls within sub-paragraph (a)(i) or an authorised institution has guaranteed to the holder of the relevant debt security the repayment of the principal and the payment of any interest or premium in connection therewith;

(b) in the case of a company falling within sub-paragraph (a)(i) or (ii) above, its net assets, or, in the case of a person falling within sub-paragraph (a)(iv) above where the guarantor is not an authorised institution, the guarantor’s net assets, were shown in its last audited individual or group accounts (as the case may be) to be not less than £25 million (or an amount of equivalent value denominated wholly or partly otherwise than in sterling);

(c) in consideration of the deposit a single debt security is issued, in the form of a relevant debt security, which has a redemption value of not less than £100,000 (or an amount of equivalent value denominated wholly or partly otherwise than in sterling), the whole or part of which may be transferred only if the redemption value of each relevant debt security being transferred is not less than £100,000 (or an amount of equivalent value denominated wholly or partly otherwise than in sterling); and

(d) the relevant debt security–

(i) if commercial paper, bears the rubric “commercial paper issued in accordance with regulations made under section 4 of the Banking Act 1987”;

(ii) if a medium term note, bears the rubric “medium term note issued in accordance with regulations made under section 4 of the Banking Act 1987”;

(iii) states the name of the issuer and that the issuer is not an authorised institution and either states that repayment of the principal and the payment of any interest or premium in connection with the relevant debt security have not been guaranteed, or, if they have been guaranteed, states that this is the case, the name of the guarantor and whether or not the guarantor is an authorised institution; and

(iv) if it is issued by a company falling within sub-paragraph (a)(i) or (ii) above, or where it is not issued by such a company but is guaranteed by a company falling within sub-paragraph (a)(i) above, and is not offered by a prospectus to which section 56 or 72 of the Companies Act 1985(10) or the corresponding Northern Ireland legislation applies, includes a statement made by the company accepting the deposit or the guarantor (as the case may be) that the relevant company has complied with its obligations under the relevant rules and that, since the last publication in compliance with the relevant rules of information about the relevant company, the relevant company, having made all reasonable enquiries, has not become aware of any change in circumstances which could reasonably be regarded as significantly and adversely affecting its ability to meet its obligations in respect of the relevant debt security as they fall due. In this paragraph “the relevant rules” means–

(aa) in the case of a company whose shares or debt securities have been admitted to the Official List, the listing rules, or

(bb) in the case of a company whose shares or debt securities are dealt in on the Unlisted Securities Market, the terms and conditions of entry to the Unlisted Securities Market, or

(cc) in the case of a company not falling within sub-paragraph (aa) or (bb) above, Schedule 3 to these Regulations.”;

(e) Schedule 1 hereto shall be substituted for Schedule 1 to the principal Regulations; and

(f) Schedule 2 hereto shall be substituted for Schedule 3 to the principal Regulations.

(1)

1985 c. 6; relevant amendments to which are noted below.

(2)

S.I. 1986/1032 (N.I.6).

(3)

1965 c. 12.

(4)

1969 c. 24 (N.I.).

(5)

1979 c. 34.

(6)

S.I. 1985/1205 (N.I.12).

(7)

1986 c. 60.

(8)

The list and the Rules may be obtained from the Quotations Department, The Stock Exchange, London EC2N 1HP.

(9)

1985 c. 6; section 736 is substituted by section 144 of the Companies Act 1989 (c. 40) with effect from a day to be appointed.

(10)

1985 c. 6; Part III (capital issues) is repealed by Part I of Schedule 2 to the Financial Services Act 1986 (c. 60) with effect from a day to be appointed.