Migration of Participating Securities Act 2019

Cited as:IR No. 50/2019
Jurisdiction:Ireland


Migration of Participating Securities Act 2019

2019 50

An Act to make, in the public interest, provision with respect to the contingency that a substitute securities settlement system, compatible with the law of the European Union, may be required, on or after 30 March 2021, for the securities settlement system commonly known as CREST; for that purpose to enable issuers of certain securities to avail themselves of the procedures hereafter provided whereby such a substitute securities settlement system will, by virtue of the operation of this Act, become available in respect of those securities and to provide for related matters.

[26 December 2019]

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S-1 Interpretation

1 Interpretation

(1) In this Act—

“Act of 2014” means the Companies Act 2014;

“applicable CREST arrangements” means the rules, practices and procedures, as referred to in the Schedule to the Regulations of 1996, of Euroclear UK & Ireland Limited with respect to CREST;

“central securities depository” has the meaning given to it by the CSD Regulation;

“certificated form”, in relation to a share, shall be construed in accordance with section 2(2);

“CREST” means the relevant system operated by Euroclear UK & Ireland Limited, being the person who, under Regulation 28 of the Regulations of 1996, has been granted recognition by the Minister for Business, Enterprise and Innovation to operate that system;

“CSD Regulation” means Regulation 909/2014 of the European Parliament and of the Council of 23 July 2014 11 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;

“Listing Authority” means the Irish Stock Exchange plc;

“live date”, subject to section 6(2), means the date appointed by the Listing Authority under subsection (5) of section 12 to be the live date for the purposes of this Act and subsection (7) of section 12 and section 13 supplement this definition;

“migration”, in relation to participating securities, shall be construed in accordance with section 3;

“Minister” means the Minister for Finance;

“nominated central securities depository” has the meaning given to it by section 3(1);

“participating issuer” has the meaning given to it by the Regulations of 1996;

“participating security” has the meaning given to it by the Regulations of 1996;

“prescribed” means prescribed by regulations made by the Minister under section 14;

“Regulations of 1996” means the Companies Act 1990 (Uncertificated Securities) Regulations 1996 (S.I. No. 68 of 1996);

“relevant participating securities” shall be construed in accordance with section 4(1);

“relevant system” has the meaning given to it by the Regulations of 1996;

“securities” means transferable securities as defined by Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 22 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU;

“share”, in relation to a participating issuer, includes stock in the share capital of the participating issuer;

“uncertificated form”, in relation to a share, shall be construed in accordance with section 2(1).

(2) A reference in this Act to the Member State in which a central securities depository is authorised is a reference to the Member State, the competent authority of which has authorised the central securities depository under the CSD Regulation.

1 OJ No. L 257, 28.08.2014, p.1

2 OJ No. L 173, 12.6.2014, p.349

S-2 Share in uncertificated form or certificated form - meaning of those expressions

2 Share in uncertificated form or certificated form - meaning of those expressions

(1) A reference in this Act to a share that is in uncertificated form is a reference to such a share that is an uncertificated unit of a security (within the meaning of the Regulations of 1996).

(2) A reference in this Act to a share that is in certificated form is a reference to the share being the subject of a certificate as referred to in section 99(1) of the Act of 2014 (as applied by Part 17 or any other Part of that Act).

S-3 Migration - meaning of that expression and supplemental provision

3 Migration - meaning of that expression and supplemental provision

(1) In this section—

“nominated central securities depository” means the particular central securities depository that is expressed in the special resolution specified in section 5(1) to be the central securities depository to which it is proposed that the participating securities concerned will be migrated;

“security holders” means the holders of the participating securities of the kind referred to in section 4(1).

(2) In this Act, a reference to the migration of participating securities of the kind referred to in section 4(1) shall be construed as a reference to both of the following occurring (with effect, as provided under section 11, on the live date referred to therein):

(a)

the title to those participating securities becoming and being vested in—

(i) the nominated central securities depository, or

(ii) if such a body has been so nominated in this behalf, a body nominated by the nominated central securities depository with respect to its operations as a central securities depository,

for the purpose of the recording of those securities in book-entry form and the settlement of trades in respect of them being effected through that depository’s settlement system;

(b)

the applicable CREST arrangements in relation to those participating securities ceasing to be in force.

(3) Neither subsection (2) nor any other provision of this Act shall be construed as—

(a)

affecting the continued application of the Act of 2014 to the participating issuer concerned, or

(b)

operating to divest the security holders of their relevant rights or interests in the participating securities concerned,

on and from the date on which the migration takes effect, but subsections (3) and (4) of section 11 make provision with respect to the application of sections 94(4) and 99(2) of the Act of 2014 and this subsection shall be construed subject to those subsections.

S-4 Migration of securities by participating issuers

4 Migration of securities by participating issuers

(1) A participating issuer may consent to a migration, in accordance with this Act, of those of the participating securities in the issuer that are shares (referred to subsequently in this Act as “relevant participating securities”), subject to—

(a)

a special resolution, as specified insubsection (1) of section 5 and which satisfies subsection (2) of that section, having been passed by the participating issuer, and

(b)

each of the following—

(i) the conditions specified insection 5(5) in relation to that resolution and the condition specified in section 6(4),

(ii)section 6(1), and

(iii) section 198 of the Act of 2014 (as applied bysection 9),

having been satisfied or complied with by the participating issuer.

(2) Subsection (1) shall have effect notwithstanding section 94(4) of the Act of 2014 (as applied by Part 17 or any other Part of that Act) or anything in the participating issuer’s constitution.

S-5 Requirements to be complied with for consent by issuer to migration: special resolution

5 Requirements to be complied with for consent by issuer to migration: special resolution

(1) The special resolution referred to in section 4(1) is a special resolution that approves of the participating issuer giving its consent to the migration, in accordance with this Act, of the relevant participating securities in the participating issuer and which satisfies subsection (2).

(2) The following applies as respects the terms of the foregoing special resolution, so far as they relate to the migration to which the resolution refers, namely, the migration shall be expressed to be a migration of the relevant participating securities to a central securities depository specified in the resolution, and there shall be stated in the resolution—

(a)

the name of the Member State in which that central securities depository is authorised, and

(b)

if, as referred to insection 3(2)(a), the title to the relevant participating securities will become and be vested in a body nominated by that central securities depository, the fact that the title will become so vested and the name of the body concerned,

and subsections (3) to (6) supplement this subsection.

(3) For the purposes of subsection (2) where, as respects the fact of the central securities depository’s authorisation, the resolution states, without more, that the central securities depository is authorised in a particular Member State, such a statement shall suffice and it shall not be necessary to specify that the competent authority of that Member State has authorised the central securities depository under the CSD Regulation.

(4) The name of a central securities depository shall not be specified in the special resolution referred to in this section unless the following conditions are satisfied prior to the giving of the notice to the members of the participating issuer of the meeting at which it is proposed to pass the special resolution.

(5) The conditions referred to in subsection (4) are:

(a)

the participating issuer has, in writing, notified the central securities depository of the proposal that the relevant participating securities in the issuer are to be the subject of migration, in accordance with this Act, to that depository;

(b)

there has been received by the participating issuer the statement specified insubsection (6)(a) following consideration by that depository of Article 23 of the CSD Regulation as it relates to the proposed provision of the services of the settlement system concerned to that issuer;

(c)

there has been received by the participating issuer the statement specified insubsection (6)(b) following—

(i) such inquiries as have been made of...

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