81.—(1) Where the function of admitting securities into the system is delegated to it, it is the duty of the Operator not to agree to the conversion of any security into, or issue of any security in, uncertificated form unless it has made adequate arrangements for the carrying out of its own functions under these Regulations, so far as that security is concerned or makes its agreement subject to the completion of those arrangements. Such arrangements shall include crediting, in a record of entitlements for the security, the Operator as a controller acting under regulation 62 and any alternative company controller with any entitlements the Operator is instructed by the company to credit them with.
(2) The Operator shall not be required to agree to the conversion of a security into, or issue of a new security in, uncertificated form if, in the Operator’s opinion, the security is unsuitable, by reason (in the case of shares) of the terms of the company’s memorandum or articles of association or (in the case of any securities) of the terms governing its issue, to be an uncertificated security given the facilities available for the operation of the system or any additional provision made in the company’s memorandum or articles of association, or (as the case may be) in any other terms of issue of the security, under regulation 120.
(3) The Secretary of State, where the function of admitting securities into the system has been delegated to the Operator, may direct the Operator:
(a)to agree to the conversion or issue of a security in uncertificated form (subject to such conditions being imposed as he may direct) upon the application of any person aggrieved by a refusal of the Operator to so agree, if in his opinion the Operator’s decision is arbitrary or otherwise without adequate justification; or
(b)to abandon any condition it has imposed on its agreement to the conversion of a security into or issue of any security in uncertificated form, if in his opinion the condition is arbitrary or otherwise without adequate justification.
82.—(1) Upon the conversion of a security into, or the issue of units of a security in, uncertificated form, a controller recorded on a record of entitlements prepared for the security as having an entitlement to a unit of the security converted or issued shall there-upon have that entitlement save that where, and for as long as, the sum of the entitlements on the Operator’s and company’s records of entitlements exceeds the units of a security in issue, the question whether the controller has the entitlement is in addition to be deter-mined by ascertaining whether the controller would have been recorded with it if the excess had not arisen.
(2) Schedule 5 to these Regulations makes further provision with respect to the con-version of a security into, or issue of units of a security in, uncertiticated form.