Explanatory note

This Order closes the National Savings Stock Register (“the Register”) to the registration of gilts on and after 20th July 1998, and provides for all gilts registered in that Register at the beginning of that day to be transferred to the books of the Bank of England (“the Bank”) (articles 3 and 4). “Gilts” is defined for the purposes of the Order as stock or bonds of any of the descriptions included in Part I of Schedule 11 to the Finance Act 1942 (which describes the stock and bonds that are registrable in the books of the Bank of England). The Order also transfers to the Bank all the rights and liabilities of the Director of Savings arising before 20th July 1998 in relation to the registration of gilts or any transaction associated with it (article 5).

The remaining provisions of the Order are consequential, incidental, supplementary or transitional in connection with that closure and transfer, and include provision amending primary and secondary legislation. Between 3rd and 20th July 1998, the Director of Savings is given discretion not to process applications to exchange gilts in the Register for gilts in the books of the Bank where it appears to him that the exchange would not be likely to be carried into effect by the latter date (article 6). The Bank is given discretion not to process applications to exchange gilts in its books for gilts in the Register during the same period, having regard to any representations made by the applicant (article 7).

Any application for the sale or purchase of gilts in the Register, to subscribe for gilts in the Register, to transfer gilts in the Register, or to exchange gilts in the Register for gilts in the books of the Bank of Ireland or vice versa, which is pending on 20th July 1998 is to be dealt with by or in relation to the Bank of England and its books as if it were an application of a corresponding kind applicable to the Bank and its books, subject in some cases to certain minor modifications (articles 8–13). Applications of a similar kind received during the year following that date will also be treated in that way and, in the case of an application for transfer, after that time as well (article 14).

Where adjudication proceedings under section 5(1) of the National Debt Act 1972, or any further proceedings arising out of such proceedings, are pending on 20th July 1998, the Director of Savings is to continue to be a party to the proceedings and is to satisfy or enjoy any relief granted in the proceedings, except so far as it affects registration (in which case the Bank is required to amend its books to give effect to the relief) (article 15).

Gilts held in the Register by minors on 20th July 1998 are to continue to be held in accordance with the substantive provisions which relate specifically to minors who hold in the Register, modified so that the Bank takes the place of the Director of Savings (article 16).

A nomination which, immediately before 20th July 1998, extends to any gilts in the Register will continue to extend to them in accordance with the provisions which governed it before that date, subject to some modifications, but will not extend to any other gilts held by the nominator in the books of the Bank. Where a nomination extends to gilts in the books of the Bank, a notice of revocation may be sent either to the Director of Savings or to the Bank. (Articles 18 and 19 and paragraphs 3–7 of Schedule 1 deal with nominations).

Standing arrangements for the payment of dividends in existence immediately before 20th July 1998 will continue to apply to gilts transferred to the books of the Bank (article 19). The same applies to standing authorities for joint holders to act by a majority (article 20, which also provides for notice of revocation of such authority to be sent to the Bank instead of the Director of Savings). The Bank is also given discretion to continue any standing arrangements for the payment into the National Savings Bank of moneys falling due in respect of any gilts transferred to its books under this Order, and the Orders limiting the aggregate value of deposits that may be received on account of a depositor by the latter Bank are modified to permit this (article 21 and paragraphs 8 and 9 of Schedule 1).

Consequential provision is made to enable the legislation relating, in respect of the books of the Bank, to unclaimed stock and dividends to apply comprehensively in relation to the registrations, rights and liabilities transferred under this Order (articles 22–24).

Certificates issued by the Director of Savings before 20th July 1998 in relation to the registration in the Register of any gilts that are transferred to the books of the Bank under this Order are to continue to have effect as if they had been issued by the Bank in relation to its books (article 25(1)). For the purpose of giving effect to the Order, things done by or in relation to the Director of Savings are to be deemed to have been done by or in relation to the Bank, and references in documents to the Director of Savings or the Register are to be deemed to refer to the books of the Bank (article 25(2)).

Warrants issued before 20th July 1998 in respect of gilts in the Register are to continue to be dealt with in accordance with the National Savings Stock Register Regulations 1976, but arrangements may be made for the Bank to pay them (article 26).

Where the holder of gilts transferred to the books of the Bank under this Order dies before the transfer, those gilts are to be regarded, after the transfer, as having been held by him in the books of the Bank, and not in the Register, at the date of his death for the purpose of ascertaining whether the value of his holdings in the Register and in the books respectively exceeded (at that date) the £5,000 limit below which payment without a grant of probate, letters of administration or confirmation as executor is authorised.

Provision is made for the provision of relevant records by the Director of Savings to the Bank (article 28, see also article 15(4)–(6), article 18(10)–(11) and paragraphs 4 and 7 of Schedule 1). Nothing done under, or to give effect to, the Order is to be taken to infringe the obligation of secrecy imposed by regulation 57 of the National Savings Stock Register Regulations 1976 (article 28(8)).

The Treasury, the National Debt Commissioners, the Director of Savings and the Banks of England and Ireland are indemnified when they act in accordance with the Order, with a saving for rights against third parties (article 29).

Schedule 2 repeals or revokes provisions which become spent or unnecessary in consequence of the substantive provisions of the Order.