The Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations 2004

Explanatory Note

(This note is not part of the Regulations)

With effect from 20th October 1997 (being the day appointed by S.I. 1997/2428 (C.95)), sections 97, 98,102, and 103 of the Finance Act 1997 (c. 16) introduced new rules conferring relief from stamp duty and stamp duty reserve tax for intermediaries trading in United Kingdom securities, and similar relief in connection with stock borrowing and sale and repurchase arrangements.

These Regulations, which have effect from 1st February 2005, confer relief for persons, other than intermediaries, trading on EDX London or reporting such trades to EDX London pursuant to the rules of EDX London.

Regulation 1 provides for the citation, commencement and effect of the Regulations, and regulation 2 for interpretation of some terms used in them.

Regulation 3 prescribes EDX London as a prescribed recognised investment exchange, and LCH.Clearnet as a prescribed recognised clearing house, for the purposes of the Regulations.

Regulation 4 exempts from stamp duty or stamp duty reserve tax transfers of securities, or agreements to transfer securities, to LCH.Clearnet (or its nominee) in its capacity as a clearer of transactions on EDX London resulting from the exercise of options or the expiration of futures contracts.

Regulation 5 exempts from stamp duty or stamp duty reserve tax transfers of securities, or agreements to transfer securities, resulting from the exercise of options to receive securities, in cases where the transfer or agreement to transfer is from a member of EDX London who is not authorised to clear transactions on that exchange, or his nominee, to a member who is so authorised (a “clearing member”), or his nominee. It also exempts transfers from LCH.Clearnet Limited (in its capacity as a clearer of transactions on EDX London) or its nominee to a clearing member or his nominee.

These Regulations do not impose new costs on business.