June 19 2007
The Uncertificated Securities (Enabling Provisions) (Guernsey) Law 2005 was registered on May 15 2006. The law permits that, after consultation with the Guernsey Financial Services Commission, the States of Guernsey Commerce and Employment Department may make regulations providing for title to securities, or to any specified class or description of securities, to be evidenced and transferred without a written instrument.
It is proposed that regulations be introduced under the law later in 2007; draft Uncertificated Securities (Guernsey) Regulations 2007 have recently been published. The purpose of these regulations is to provide a framework for title to securities to be evidenced and transferred by means of a computerized settlement system without a written instrument. In this regard, the regulations provide a framework under which the commission may authorize local operators of computerized settlement systems and recognize foreign operators of computerized settlement systems that are active locally.
Any fees charged by the commission under the regulations will be subject to separate consultation (there is no intention to charge fees in the near future).
'Securities' are defined in the regulations as:
The regulations provide for:
These changes will have the effect of placing Guernsey in a competitive position, on par with the United Kingdom, Ireland and other offshore jurisdictions where CRESTCo Limited or similar organizations are already recognized as clearing houses through which uncertificated shares of numerous (mostly listed) companies may be dealt.
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