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The Unit Trusts (Electronic Communications) Order 2008

Draft. This instrument was laid in draft and may differ from the one made. Look for the made version under its title.

Draft 2008, ISBN 9780111470718

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

Draft Order laid before Parliament under section 9(4) of the Electronic Communications Act 2000, for approval by resolution of each House of Parliament.

Financial Services And Markets

Made 2008

Coming into force 2008

A draft of this Order has been laid before Parliament in accordance with section 9(4) of the Electronic Communications Act 2000f1 and approved by resolution of each House of Parliament;

The Treasury, considering that the authorisation of the use of electronic communications by this Order for any purpose is such that the extent (if any) to which records of things done for that purpose will be available will be no less satisfactory in cases where use is made of electronic communications than in other cases, make the following Order in exercise of the powers conferred on them by sections 8 and 9 of the Electronic Communications Act 2000:

Annotations to the whole text

Footnotes

f1

2000 c. 7. The definition of “electronic communication” in section 15(1) was amended by the Communications Act 2003 (c. 21), section 406(1) and Schedule 17, paragraph 158.

Contents

  1. 1Citation and commencement
  2. 2Interpretation
  3. 3Dispositions of units in authorised unit trust schemes by electronic communication
  4. 4Gratuitous unilateral obligations relating to units in authorised unit trust schemes
  5. 5Grants or assignments of any trust or confidence
  6. Signature
  7. Explanatory note

1Citation and commencement

This Order may be cited as the Unit Trusts (Electronic Communications) Order 2008 and comes into force on [ ] 2008.

2Interpretation

In this Order—

  • “the 2001 instrument” means the General Provisions and Glossary Instrument 2001 (2001/7)f1 made by the Authority under the Act on 21st June 2001;

  • “the Act” means the Financial Services and Markets Act 2000f2;

  • “authorised unit trust scheme” has the meaning given in section 237(3) of the Act;

  • “the Authority” means the Financial Services Authority;

  • “manager” has the meaning given in that part of its definition in the Glossary contained in the 2001 instrument which relates to an authorised unit trust scheme;

  • “register” has the meaning given in that part of its definition in the Glossary contained in the 2001 instrumentf3 which relates to unitholders of an authorised unit trust scheme;

  • “trust deed” has the meaning given in that part of its definition in the Glossary contained in the 2001 instrumentf4 which relates to an authorised unit trust scheme;

  • “trustee” has the meaning given in section 237(2) of the Act;

  • “unit” has the meaning given in that part of its definition in the Glossary contained in the 2001 instrument which relates to an authorised unit trust scheme; and

  • “unitholder” has the meaning given in that part of its definition in the Glossary contained in the 2001 instrument f5.

3Dispositions of units in authorised unit trust schemes by electronic communication

(1)

This article extends to England and Wales only.

(2)

Subject to paragraph (4), section 53(1)(c) of the Law of Property Act 1925f1 (which imposes requirements for certain dispositions to be in writing) shall not apply (if it would otherwise do so) to any disposition of units in an authorised unit trust scheme where—

(a)

the disposition is by means of electronic communication;

(b)

the electronic communication is made by the person disposing of the units or by his agent authorised in writing or by will; and

(c)

such evidence (if any) as the trustee or manager of the scheme, being the person responsible for the register of unitholders in accordance with the trust deed, may require to prove the right of the person referred to in sub-paragraph (b) to dispose of the units is provided to the trustee or manager.

(3)

The trustee or manager mentioned in paragraph (2)(c) may refuse to register a transfer of units by means of electronic communication.

(4)

This article shall be of no effect in a particular case if the trustee or manager mentioned in paragraph (2)(c) refuses to register the transfer of units which would, apart from paragraph (3), be made by the disposition in that case.

4Gratuitous unilateral obligations relating to units in authorised unit trust schemes

(1)

This article extends to Scotland only.

(2)

Subject to paragraph (5), section 1(2)(a)(ii) of the Requirements of Writing (Scotland) Act 1995f1 (which requires certain gratuitous unilateral obligations to be in writing) shall not apply (if it would otherwise do so) to any gratuitous unilateral obligation relating to units in an authorised unit trust scheme where—

(a)

the obligation is created by means of electronic communication;

(b)

the electronic communication is made by the debtor in the obligation; and

(c)

such evidence (if any) as the trustee or manager of the scheme, being the person responsible for the register of unitholders in accordance with the trust deed, may require to prove the right of the person referred to in sub-paragraph (b) to create the obligation is provided to the trustee or manager.

(3)

Where section 1(2)(a)(ii) of that Act does not apply by virtue of paragraph (2), the obligation shall not be considered an obligation mentioned in subsection (2)(a) of that section for the purposes of subsection (3).

(4)

The trustee or manager mentioned in paragraph (2)(c) may refuse to register a transfer of units by means of electronic communication.

(5)

This article shall be of no effect in a particular case if the trustee or manager mentioned in paragraph (2)(c) refuses to register the transfer of units which would, apart from paragraph (4), be made by the creation of the obligation in that case.

5Grants or assignments of any trust or confidence

(1)

This article extends to Northern Ireland only.

(2)

Subject to paragraph (4), section 6 of the Statute of Frauds (Ireland) 1695f1 (which requires all grants and assignments of any trust or confidence to be in writing) shall not apply (if it would otherwise do so) to any grant or assignment of units in an authorised unit trust scheme where—

(a)

the grant or assignment is by means of electronic communication;

(b)

the electronic communication is made by the person granting or assigning the units; and

(c)

such evidence (if any) as the trustee or manager of the scheme, being the person responsible for the register of unitholders in accordance with the trust deed, may require to prove the right of the person referred to in sub-paragraph (b) to grant or assign the units is provided to the trustee or manager.

(3)

The trustee or manager mentioned in paragraph (2)(c) may refuse to register a transfer of units by means of electronic communication.

(4)

This article shall be of no effect in a particular case if the trustee or manager mentioned in paragraph (2)(c) refuses to register the transfer of units which would, apart from paragraph (3), be made by the grant or assignment in that case.

Signature

Name

Name

Two of the Lords Commissioners of Her Majesty’s Treasury

Date

Explanatory note

(This note is not part of the Order)

This Order modifies the application of section 53(1)(c) of the Law of Property Act 1925 (c.20) (“the 1925 Act”) to dispositions of units in unit trust schemes, so as to make transfers of such units possible by electronic communication. It also modifies the application of section 1(2)(a)(ii) of the Requirements of Writing (Scotland) Act 1995 (c.7) (“the 1995 Act”) to gifts of such units, so as to make them possible by electronic communication. Finally, it modifies the application of section VI of the Statute of Frauds (Ireland) 1695 (c.12 (Ir)) (“the 1695 Act”) to the grant or assignment of such units so as to make them possible by electronic communication.

Section 53(1)(c) of the 1925 Act requires a disposition of an equitable interest or trust to be in writing signed by the person disposing of it, or by his agent authorised in writing or by will. Article 3 of this Order provides that section 53(1)(c) does not apply to a disposition by means of an electronic communication, where that communication is made by the person disposing of the units or his agent authorised in writing or by will. “Electronic communication” has the same meaning as in the Electronic Communications Act 2000 (c.8). A further condition for article 3 to operate is that any evidence that the person responsible for the register of the scheme may require (to prove that the person disposing of the units has the right to do so) has been provided. Article 3(3) gives the person responsible for the register of the scheme (the trustee or manager) a right to refuse a transfer by electronic communication. If he does so in a particular case, article 3 shall be of no effect in that case.

Section 1(2)(a)(ii) of the 1995 Act provides that a written document is required for a gratuitous unilateral obligation (a gift) except if undertaken in the course of business. Article 4 of this Order provides that section 1(2)(a)(ii) does not apply to an obligation by means of an electronic communication made by the debtor. There is a similar condition that any evidence required by the person responsible for the register of the scheme must be provided and a similar right to refuse to register a transfer by electronic communication.

Section VI of the 1695 Act requires a grant or assignment of any trust or confidence to be in writing signed by the party granting or assigning it or effected by will. Article 5 of this Order provides that section VI does not apply to a grant or assignment where the grant or assignment is by means of electronic communication. There is a similar condition as in articles 3 and 4 that any evidence required by the person responsible for the register of the scheme must be provided and a similar right to refuse to register a transfer by electronic communication.

A full regulatory impact assessment of the effect that this instrument will have on the costs of business is available on HM Treasury’s website (www.hm-treasury.gov.uk) or from Savings and Investment Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is annexed to the Explanatory Memorandum which is available with the instrument on the OPSI website (www.opsi.gov.uk).