CHAPTER 2

Special provisions relating to dematerialised securities

78A. Interpretation (Chapter 2)

(1) In this Chapter—

“central securities depository” or “CSD” has the same meaning as in the CSD Regulation;

“CSD Regulation” means Regulation 909/2014 of the European Parliament and of the Council of 23 July 201443 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No. 236/2012;

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“dematerialised securities” means securities in respect of which physical certificates or documents of title indicating ownership have been eliminated such that the securities exist only as accounting or book entry records;

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“depository receipt” means a security which represents ownership of an underlying security and which can be traded independently of the underlying security;

“immobilisation” means the act of concentrating the location of securities in, or on behalf of, a CSD in a way that enables subsequent transfers of interests in those securities to be made by book entry;

“interest in securities” means—

(a) any legal or equitable interest or right in, or in relation to, a security,

(b) a depository receipt,

(c) an indirect interest or right in, or in relation to, underlying securities arising from the immobilisation or dematerialisation of the securities, or

(d) without prejudice to the generality of paragraph (c), an interest or right in, or in relation to, securities which are held in, or on behalf of, a CSD, the rules of which require holders of interests or rights in, or in relation to, securities to hold those interests or rights by way of a co-ownership interest in a fungible pool of underlying securities;

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“operator” means a person who operates a securities settlement system;

“participant” means a person permitted by an operator to input a transfer order;

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“relevant system” means a securities settlement system that is operated by a CSD;

“securities” means any stocks or marketable securities;

“securities settlement system” means a formal arrangement with common rules and standardised arrangements for the execution of transfer orders by electronic means;

“third country CSD” means a CSD located outside the European Union that would come within the CSD Regulation if it were located in the European Union;

“transfer order” means a properly authenticated instruction to transfer an interest in securities.

(2) A reference to a CSD in this Chapter includes a reference to a third country CSD.

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(3) This Chapter applies solely to the transfer of interests in dematerialised securities.

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(3) This Chapter applies only where an interest in securities is transferred by electronic means.

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