Part 11Manufactured payments and repos
Chapter 6Powers to modify repo provisions
612Non-standard repo cases
1
The Treasury may by regulations provide for—
a
sections 601 to 606 (deemed manufactured payments: repos),
b
sections 607 to 610 (treatment of price differences under repos), or
c
any of those sections,
to apply with modifications in relation to non-standard repo cases.
2
A case is a non-standard repo case if—
a
there is a repo in respect of securities,
b
under the repo, there has been a sale (“the original sale”) of the securities by the original owner to the interim holder, and
c
any of conditions A to E is met in relation to the repo.
3
Condition A is that—
a
the obligation to buy back the securities is not performed, or
b
the option to buy them back is not exercised.
4
Condition B is that provision is made by or under an agreement for different or additional UK shares, UK securities or overseas securities to be treated as (or as included with) representative securities.
5
Condition C is that provision is made by or under an agreement for any UK shares, UK securities or overseas securities to be treated as not included with representative securities.
6
Condition D is that provision is made by or under an agreement for the sale price or repurchase price to be decided or varied wholly or partly by reference to post-agreement fluctuations.
7
Condition E is that provision is made by or under an agreement for a person to be required, in a case where there are post-agreement fluctuations, to make a payment in the period—
a
beginning immediately after the making of the agreement for the original sale, and
b
ending when the repurchase price becomes due.
8
“Post-agreement fluctuations” are fluctuations in the value of —
a
securities transferred in pursuance of the original sale, or
b
representative securities,
which occur in the period after the making of the agreement for the original sale.
9
“Representative securities” are UK shares, UK securities or overseas securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale.