# The Income Tax (Stock Lending) Regulations 1989, Regulation 5: Conditions relating to the transfer of gilt-edged securities


(1) The conditions specified in this regulation in relation to an arrangement mentioned in subsection (1) are–
(a) that the person referred to as A in the principal section is an approved borrower;
(b) that the person referred to as B in the principal section is an approved moneybroker;
(c) that the arrangement takes a form approved by the Board;
(d) that the contract of sale mentioned in the subsection was entered into by A in the ordinary course of his business;
(e) that where A is an approved borrower by virtue of sub-paragraph (b) of the definition in paragraph (4) below, the additional conditions specified in paragraph (2) below are fulfilled.
(2) The additional conditions specified in this paragraph are–
(a) that the final redemption date of any security to which the arrangement relates is not more than seven years after the date on which the arrangement is made;
(b) that the arrangement provides that the transfer referred to in paragraph (a) of subsection (1) of any security to which the arrangement relates is not to be effected–
(i) within the three weeks before any date in an interest period which is an ex-dividend date in relation to that security where the final redemption date of that security would be more than five years after that ex-dividend date, or
(ii) on any date in an interest period which is an ex-dividend date in relation to that security in any other case;
(c) that the transfer referred to in paragraph (b) of subsection (1) is effected—
(i) more than three weeks before any date in an interest period which is an ex-dividend date in relation to that security where the final redemption date of that security would be more than five years after that ex-dividend date, or
(ii) before any date in an interest period which is an ex-dividend date in relation to that security in any other case.
(3) The conditions specified in this regulation in relation to an arrangement mentioned in subsection (2) are–
(a) that B is an approved moneybroker;
(b) that the person referred to as C in the principal section, and any person for whom C is acting in connection with the arrangement as an agent or nominee, is an approved lender;
(c) that the arrangement takes a form approved by the Board.
(4) In this regulation–
“approved borrower” means a person who, at the time when the arrangement is made–
(a) is a market maker in relation to securities of the kind which are the subject of the arrangement, or
(b) has a money market dealing relationship with the Bank of England and is approved by the Board as such a person for the purposes of this regulation;
“approved lender” means a person who, at the time when the arrangement is made, is approved as a lender by the Board for the purposes of this regulation;
“approved moneybroker” means a member of the Stock Exchange who, at the time when the arrangement is made, carries on business as a money broker and is approved as such by the Board for the purposes of this regulation;
“ex-dividend date” in relation to a security means the date in any interest period on which the security is first listed in The Stock Exchange Daily Official List at a price excluding the value of the interest payment next payable;
“final redemption date” means the latest date on which a security may be redeemed in accordance with the terms on which it was issued;
“interest period” means any period between the dates on which interest is payable on a security or, where no interest has yet been paid, the period between the date of issue of a security and the first date on which interest is payable on that security.

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Source: https://www.legislation.gov.uk/uksi/1989/1299/regulation/5 (the official version)
Page: https://openlegislation.uk/income-tax-stock-lending-regulations-1989/regulation-5
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.