Companies (Uncertificated Securities) (Jersey) Order 1999

Summary

This Order creates the legal framework allowing Jersey companies to issue and transfer shares and other securities in uncertificated (dematerialised) form through approved computer systems, instead of using paper certificates. It sets out how operators of such computer systems are approved or recognised by the Jersey Financial Services Commission, and the duties issuers, members and operators owe each other when title is transferred electronically.

• Operator approval and recognition: The Commission may approve a person as an operator of a computer system, or recognise an overseas operator already approved by a competent authority elsewhere, subject to conditions and the requirements set out in the Schedule.
• Ongoing operator obligations: Approved and recognised operators must supply information to the Commission on request, comply with directions and compliance orders, and can have their approval or recognition suspended or revoked by the Commission or the Royal Court for specified failures (e.g. non-commencement, prolonged cessation, insolvency, serious offences, breach of conditions).
• Issuer participation duties: Companies and other issuers participating in a computer system have duties concerning the keeping of registers of securities, registration and refusal of transfers, notifying the operator of irregularities, and converting securities between certificated and uncertificated form.
• Computer instructions and liability: The Order governs authenticated computer instructions, the right of addressees to rely on them, and liability rules for erroneous, hacked, or induced instructions, including compensation obligations of authorised operators.
• Miscellaneous provisions: Additional rules address the interaction of this Order with other laws, the position of trustees and personal representatives, notices of meetings and to minority shareholders, irrevocable powers of attorney, and liability of issuers' officers for breaches of statutory duty.

The Schedule sets detailed requirements for approval of operators, covering financial resources, system security, operating procedures, and the content of an operator's rules and practices governing members, issuers and users.

Key obligations

• An authorized operator who issues, amends, adds to or revokes any rules or guidance must deliver a copy of the issued rules, guidance or change to the Commission within 7 days.
• An authorized operator must provide further information about its operations to the Commission when required by notice, in the manner and form the Commission specifies.
• An approved operator must commence operating a computer system within 12 months of its approval taking effect, or risk suspension or revocation of approval.
• An approved operator must not cease operation of its computer system for a period exceeding 6 months, or risk suspension or revocation of approval.
• Issuers must maintain and update registers of securities to reflect uncertificated holdings and notify the operator of registration irregularities.
• An operator must have rules requiring users and former users to provide information needed for the operator to meet its obligations under the Order.
• An operator's rules and practices must ensure efficient processing of transfers, orderly termination of disruptive participants, and adequate record keeping by any relevant nominee.

Applies to

companies (issuers of securities), approved operators of computer systems, recognized (overseas) operators of computer systems, members of a computer system, users of a computer system, settlement banks, trustees and personal representatives

Deadlines

• within 7 days: An authorized operator must deliver to the Commission a copy of any rules or guidance it issues, or any amendment, addition to or revocation of them, within 7 days.
• 12 months after approval takes effect: The Commission may suspend or revoke an approved operator's approval if it has failed to commence operating a computer system within 12 months of the approval taking effect.
• exceeding 6 months: The Commission may suspend or revoke an approved operator's approval if, having commenced operation, it has ceased operating the computer system for a period exceeding 6 months.

Related documents

• This document is made under Companies (Jersey) Law 1991