Regulation 3 Directions: trustee company
The Secretary of State may give directions to the trustee company from time to time.
A direction given under paragraph (1) may include instructions to—
convert a financial asset or a gilt into cash;
take all reasonable steps to manage any remaining financial assets with a view to converting them to cash;
transfer cash or gilts to the Treasury Solicitor or other nominee specified in the direction.
Paragraphs (4), (5), (6) and (7) apply where the trustee company considers, for any reason, that—
the conversion of a financial asset into cash would materially reduce the value of that asset, or
it is unable to comply with instructions given under a direction in relation to a particular financial asset due to the terms and conditions upon which that asset is held.
Where paragraph (3) applies, the trustee company must—
not carry out the conversion, and
notify the Secretary of State as soon as reasonably practicable.
Upon notification under paragraph (4)(b), the Secretary of State may—
where paragraph (3)(a) applies, require the trustee company to proceed with the conversion by notifying the trustee company (“an instruction to proceed”);
where paragraph (3)(b) applies, vary the direction or issue a new direction to provide further instructions in relation to that financial asset.
Where the trustee company has made a notification under paragraph (4)(b) to the Secretary of State, the trustee company must disregard the instructions given under that part of the direction that relates to the financial asset to which paragraph (3) applies unless the Secretary of State issues an instruction to proceed, varies the direction or issues a new direction to provide further instructions.
For the purposes of paragraph (3), the reference to the conversion of an asset materially reducing its value includes—
the conversion incurring a material charge, tax, penalty or market value adjustment;
the conversion incurring a material charge, tax or penalty under any agreement ancillary to or connected with the asset, or causing the termination of any such agreement.
The trustee company must comply with a direction given by the Secretary of State, subject to paragraphs (3), (4) and (6).