Citation and commencement

1. —(1) These Regulations may be cited as the Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations (No. 14) 2009 and shall come into force on 4th December 2009.

(2) These Regulations shall have effect—

(a) for the purposes of the charge to stamp duty, in relation to instruments executed on or after 4th December 2009;

(b) for the purposes of the charge to stamp duty reserve tax—

(i) in the case of agreements to transfer traded securities which are not conditional, in relation to agreements made on or after 4th December 2009;

(ii) in the case of agreements to transfer traded securities which are conditional, in relation to agreements where the condition is satisfied on or after that date.

Interpretation

2. In these Regulations—

“clearing participant” means a member of a Relevant Clearing House who as such is permitted by the Rules of that Relevant Clearing House to clear transactions made on the Facility for a traded security and who may or may not also be a participant in the Facility;

“client” means a person who gives instructions to a non-clearing firm for traded securities to be sold on the Facility;

“EuroCCP” means European Central Counterparty Limited, a company which is a recognised clearing house under the Financial Services and Markets Act 2000( 2 );

“LCH.Clearnet” means LCH.Clearnet Limited, a company which is a recognised clearing house under the Financial Services and Markets Act 2000;

“NYSE Arca Europe” or “the Facility” means the multilateral trading facility operated by Euronext Amsterdam NV, a market operator which is permitted to operate a trading facility pursuant to the Directive( 3 );

“Relevant Clearing House” means any of EuroCCP, LCH.Clearnet and X-CLEAR, each in its capacity as a person providing clearing services in connection with a transaction made on the Facility;

“X-CLEAR” means SIX X-CLEAR AG, a company which is a recognised clearing house under the Financial Services and Markets Act 2000;

“nominee” means a person whose business is or includes holding traded securities as a nominee for a Relevant Clearing House acting in its capacity as a person providing clearing services in connection with a transaction made on the Facility, or as a nominee for a clearing participant (as the case may be);

“non-clearing firm” means a participant in the Facility other than a clearing participant;

“traded securities” means stocks and shares which are issued or raised by a body corporate but does not include stocks and shares issued by a body corporate not incorporated in the United Kingdom unless—

Prescription of recognised investment exchanges and recognised clearing houses

3. For the purpose of sections 116 and 117 of the Finance Act 1991—

(a) NYSE Arca Europe is prescribed as a recognised investment exchange;

(b) EuroCCP is prescribed as a recognised clearing house;

(c) LCH.Clearnet is prescribed as a recognised clearing house; and

(d) X-CLEAR is prescribed as a recognised clearing house.

Prescribed circumstances for the purposes of sections 116 and 117

4. —(1) In the circumstances prescribed in this regulation, the charge to stamp duty and the charge to stamp duty reserve tax shall be treated as not arising.

(2) The circumstances prescribed are where, in connection with a transaction made on the Facility conditions A and B are met.

(3) Condition A is that traded securities of a particular kind are transferred, or agreed to be transferred, from—

(a) a clearing participant or a nominee of a clearing participant to another clearing participant or nominee,

(b) a non-clearing firm or its client (or a nominee of a non-clearing firm or its client) to a clearing participant or a nominee of a clearing participant,

(c) a clearing participant or a nominee of a clearing participant to a Relevant Clearing House or to a nominee of that Relevant Clearing House,

(d) a person other than a clearing participant to a Relevant Clearing House or to a nominee of a Relevant Clearing House, as a result of a failure by a clearing participant to fulfil their obligations in respect of the transaction concerned to transfer traded securities to a Relevant Clearing House or to a nominee of a Relevant Clearing House,

(e) a Relevant Clearing House or a nominee of a Relevant Clearing House to a clearing participant or a nominee of a clearing participant, or

(f) a Relevant Clearing House or a nominee of a Relevant Clearing House to another Relevant Clearing House or a nominee of another Relevant Clearing House.

(4) Condition B is that the person to whom those securities are agreed to be transferred under any of the agreements specified in paragraph (3) above (“the relevant agreement”) is required on receipt of those securities to transfer traded securities under a matching agreement to another person or, in the case of an agreement falling within paragraph (3)(d), would have been so required if the failure referred to in that paragraph had not occurred.

(5) In this regulation—

(a) a “matching agreement” means an agreement under which—

(i) the traded securities agreed to be transferred are of the same kind as the traded securities agreed to be transferred under the relevant agreement, and

(ii) the number and transfer price of the traded securities agreed to be transferred are identical to the number and transfer price of the traded securities agreed to be transferred under the relevant agreement;

(b) references to a clearing participant are references to a clearing participant in their capacity as such.

Consequential provision

5. —(1)Traded securities which are the subject of an agreement specified in regulation 4(3) shall be dealt with by a clearing participant who is party to the agreement in a separate designated account, and not otherwise.

(2) In paragraph (1) “designated account” means an account designated by a Relevant Clearing House for a clearing participant in connection with the traded securities concerned.

Revocation of the Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations (No.3) 2009 ( SI 2009/397 )

6. The Stamp Duty and Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) Regulations (No.3) 2009 ( SI 2009/397 )( 5 ) are hereby revoked as respects instruments and agreements referred to in regulation 1(2) of these regulations.