# The Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023, Part 5 This Part sets out modifications made to the Uncertificated Securities Regulations 2001. The provisions specified in the first column are modified as provided for in the corresponding entry in the second column. Treat any reference to a provision in this Part which is disapplied as a reference to any regulator rules made by the appropriate regulator under regulation 7 on the subject matter of the disapplied provision. Provision Modification Regulation 2(1) Treat “relevant system” as including the use of developing technology that allows for securities to be evidenced, transferred and recorded within the FMI sandbox arrangements. Regulation 3 Treat “dematerialised instruction” as including an instruction sent, received or generated by means of a relevant system in connection with the FMI sandbox arrangements. Treat “generate” in relation to an operator-instruction as including the initiation of procedures by which an operator instruction comes to be sent in connection with the FMI sandbox arrangements which may include an instruction that is generated automatically either wholly or in part. Treat “instruction” as including any instruction, election, acceptance or any other message of any kind in connection with the FMI sandbox arrangements which may include an instruction that is generated automatically either wholly or in part; in connection with the FMI sandbox arrangements. Treat “issuer instruction” as including a form of properly authenticated dematerialised instruction that is generated by, or attributed to, an issuer in connection with the FMI sandbox arrangements. Treat “issuer register of securities” as including a form of issuance generated by an issuer using developing technology in connection with the FMI sandbox arrangements. Treat an “operator” as not including a third country CSD, but including a DSD in connection with the FMI sandbox arrangements. Treat “operator instruction” as including a form of properly authenticated dematerialised instruction that is approved in connection with the FMI sandbox arrangements. Treat “operator register of securities” as including a form of system using developing technology that is approved in connection with the FMI sandbox arrangements. Treat “operator system” as including mechanisms, facilities and procedures which are part of the relevant system that is controlled by an Operator and which generates operator-instructions and receives dematerialised instructions from system participants, as approved in connection with the FMI sandbox arrangements. Treat “participating issuer” as including an entity that issues securities in connection with the FMI sandbox arrangements. Treat “rules” as including rules that are generated and promulgated (to include cryptographically) in connection with activities in the FMI sandbox arrangements. Treat “settlement bank” as including in relation to a relevant system, a person who has contracted to make or discharge obligations in respect of payments in connection with FMI activities. Treat “securities” as including an FMI sandbox instrument under regulation 3(7). Treat “sponsoring system-participant” as including a system participant that is permitted by an operator to send and receive (or generate) properly authenticated dematerialised instructions on another person’s behalf in connection with the FMI sandbox arrangements. Treat “system member” in relation to a relevant system as including a person permitted by an operator to participate in the transfer (to include automatic generation of) FMI sandbox instruments on the platform of a sandbox entrant in connection with the FMI sandbox arrangements. Treat “system participant”, in relation to a relevant system, as including a person permitted by an operator to send and receive (or generate) properly authenticated dematerialised instructions in connection with the FMI sandbox arrangements. Regulation 3(2)(a) Treat this regulation as disapplied. Regulation 3(2)(b) Treat this regulation as disapplied. Regulation 6 Treat this regulation as disapplied. Regulations 8 to 11B Treat these regulations as disapplied. Regulation 20 Treat “operator register of members” and “issuer register of members” as each including developing technology-based systems that are operated and maintained in connection with the FMI sandbox arrangements. Regulation 21 Treat “operator register of general public sector securities” and a “record of uncertificated general public sector securities” as each including a developing technology-based system that operates in connection with the FMI sandbox arrangements. Regulation 22 Treat “operator register of corporate securities” and a “record of uncertificated corporate securities” as including a developing technology-based system that operates in connection with the FMI sandbox arrangements. Regulation 25 Treat “rectification” as including such steps that the operator or a participating issuer require to rectify an operator register of securities or issuer register of securities in connection with FMI sandbox arrangements. Regulation 27 Treat paragraph (2) as including a transfer in respect of which the operator has received a direction from the appropriate regulator that the transfer of title is prohibited under the FMI sandbox arrangements. Treat paragraph (4) as including a transfer of units in circumstances provided for by the appropriate regulator in rules made under regulation 7. Regulation 28 Treat paragraph (3) as including where the Bank of England directs the participating issuer that the transfer of title is prohibited under the FMI sandbox arrangements. Treat paragraph (4) as including where the appropriate regulator believes the transfer of title would be contrary to section 13(1) of the Act. Regulation 29 Treat a purported transfer of title to an uncertificated unit of a security as having no effect if the transfer is not permitted by an appropriate regulator under the FMI sandbox arrangements. Regulation 30 Treat “actual notice” as including the generation of such a notice using the developing technology permitted in the FMI sandbox arrangements. Regulation 32 Treat paragraph (2) as including where such a conversion is required by an appropriate regulator in connection with the FMI sandbox arrangements. Treat paragraph (3) as including requiring an operator to generate a rematerialisation notice following a conversion event occurring in the circumstances specified in paragraph (2)(d). Regulation 35 Treat the sending of properly-authenticated dematerialised instructions as including such instructions being generated within the FMI sandbox arrangements. Treat “actual notice” as including the generation of such a notice using the technology permitted in the FMI sandbox arrangements. Regulation 36 In this regulation, treat the use of a decentralised, developing technology-based system as capable of generating a “causative act” in connection with the FMI sandbox arrangements. Regulation 38 Treat paragraph (5) as including any transfer of title or disposition or assignment of an interest in connection with the FMI sandbox arrangements. Treat paragraph (7) as including the transfer of title or disposition or assignment of an interest in connection with the FMI sandbox arrangements. Regulation 42 Treat “a notice” as including the generation of such a notice using the developing technology permitted in the FMI sandbox arrangements. Regulation 47 Liability for contraventions shall include such other persons that the appropriate regulator may identify under these Regulations. Schedule 1 Paragraph 5 Treat this paragraph as disapplied. Paragraphs 12 to 22 Treat these paragraphs as disapplied. Paragraphs 25 to 26 Treat these paragraphs as disapplied. Schedule 3 Treat this schedule as disapplied. Schedule 4 Paragraph 4 Treat this paragraph as disapplied. Paragraph 6 Treat this paragraph as modified such that the obligations under the paragraph (availability of registers and sending of notices) may be satisfied under the FMI sandbox arrangements. Paragraph 12(1) Treat this sub-paragraph as disapplied. Paragraph 14(1) Treat this sub-paragraph as disapplied. Paragraph 15(5) Treat this sub-paragraph as modified such that the obligations under the sub-paragraph (availability of registers and sending of notices) may be satisfied under the FMI sandbox arrangements. Paragraph 15(6) Treat this sub-paragraph as modified such that the obligations under the sub-paragraph (availability of registers and sending of notices) may be satisfied under the FMI sandbox arrangements. --- Source: https://www.legislation.gov.uk/uksi/2023/1398/schedule/part/5 (the official version) Page: https://openlegislation.uk/financial-services-and-markets-act-2023-digital-securities-sandbox-regulations-2023/schedule/part-5 Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.