Regulation 7 Amendments to the principal Regulations

For regulations 6 to 6B^f1 there shall be substituted the following regulation—

“Qualifying investments

6

(1)

This regulation specifies the kind of investments (“qualifying investments for plans”) which may be purchased, made or held under a plan.

(2)

Qualifying investments for plans to which paragraph (1) refers are—

(a)

shares, not being shares in an investment trust, issued by a company wherever incorporated and, subject to paragraph (3), officially listed on a recognised stock exchange;

(b)

securities (“qualifying securities”)—

(i)

issued by a company wherever incorporated,

(ii)

which satisfy at least one of the conditions specified in paragraph (5) and the condition specified in paragraph (6), and

(iii)

in the case of securities of an investment trust, purchased or acquired by the plan manager in circumstances where the trust satisfies the conditions specified in paragraphs (7) and (8);

(c)

gilt-edged securities which satisfy the condition specified in paragraph (11);

(d)

any securities issued by or on behalf of a government of any EEA State, which satisfy the condition specified in paragraph (11);

(e)

any securities which—

(i)

in relation to a security mentioned in sub-paragraph (d), would be a strip of that security if “strip” had the same meaning as in section 47 of the Finance Act 1942^f2, with the omission of the words “issued under the National Loans Act 1968^f3”, and

(ii)

satisfy the condition specified in paragraph (11);

(f)

shares in an investment trust, listed in the Official List of the Stock Exchange, in circumstances where the trust satisfies the conditions specified in paragraphs (7) and (8);

(g)

units in a securities fund or a warrant fund, or shares in a securities company or a warrant company, in circumstances where the fund or company satisfies the condition specified in paragraph (8);

(h)

units in, or shares of, a relevant UCITS, in circumstances where the UCITS satisfies the condition specified in paragraph (8);

(j)

units in a fund of funds, in circumstances where the fund satisfies the condition specified in paragraph (9);

(k)

a depositary interest;

(l)

shares which—

(i)

the qualifying individual exercised the right to acquire in accordance with the provisions of a savings-related share option scheme, or

(ii)

were appropriated to the qualifying individual in accordance with the provisions of an approved profit sharing scheme,

where the shares were transferred to the plan manager in the circumstances specified in the former regulation 4A(2) before 6th April 1999;

(m)

investments which—

(i)

were held under the plan on 5th April 2001 (without extending to further investments of a type which was so held),

(ii)

immediately before the Personal Equity Plan (Amendment) Regulations 2001 came into force on 6th April 2001, were permitted to be held under the plan by these Regulations, and which (under these Regulations as they had effect immediately before that date) would not subsequently have ceased to be permitted to be so held, and

(iii)

do not fall or, having fallen, have not ceased to fall, within any of the other sub-paragraphs of this paragraph;

(n)

cash deposited in accordance with regulation 5(3) and (3A) which a plan manager holds for the purpose of investment in investments which are qualifying investments for plans falling within any of sub-paragraphs (a) to (k).

(3)

An investment in shares fulfils the condition as to official listing in paragraph (2)(a) or (f) if—

(a)

in pursuance of a public offer, the plan manager applies for the allotment or allocation to him of shares in a company or trust which are due to be admitted to such listing within 30 days of the allocation or allotment, and which, when admitted to such listing, would be qualifying investments for plans, and

(b)

the shares are not allotted or allocated to the plan manager in the circumstances specified in paragraph (4).

(4)

The circumstances specified in this paragraph are where—

(a)

the allotment or allocation of the shares was connected with the allotment or allocation of—

(i)

shares in the company or trust of a different class, or

(ii)

rights to shares in the company or trust of a different class, or

(iii)

shares or rights to shares in another company or trust, or

(iv)

shares or rights to shares in an open-ended investment company or a part of an umbrella company, or

(v)

units or rights to units in an authorised unit trust or a part of an umbrella scheme, or

(vi)

securities or rights to securities of the company or trust, or of another company or trust,

to the plan manager, the plan investor or any other person; and

(b)

the terms on which the first-mentioned shares in this paragraph were offered were significantly more favourable to the plan manager or plan investor than they would have been if their allotment or allocation had not been connected as described in sub-paragraph (a).

(5)

The conditions specified in this paragraph are—

(a)

that the shares in the company issuing the securities are listed on the official list of a recognised stock exchange;

(b)

that the securities are so listed;

(c)

that the company issuing the securities is a 75 per cent. subsidiary of a company whose shares are so listed.

(6)

The condition specified in this paragraph is that, judged at the date when each of the securities is first held under the plan, the terms on which it was issued do not—

(a)

require the loan to be repaid or the security to be repurchased or redeemed, or

(b)

allow the holder to require the loan to be repaid or the security to be repurchased or redeemed except in circumstances which are neither certain nor likely to occur,

within the period of five years from that date.

(7)

The condition specified in this paragraph is that the investment trust has no eligible rental income, in its most recent accounting period to end before the date on which the shares in, or securities of, the investment trust first become investments under the plan, provided that the shares or securities shall cease to be qualifying investments for plans if the investment trust has any eligible rental income, in subsequent accounting periods, during which the shares or securities are held.

(8)

The condition specified in this paragraph is that not more than 50 per cent. in value of the investments of the trust, company or UCITS, or investments subject to the trusts of the scheme, as the case may be, are either—

(a)

securities which would not be qualifying securities, or

(b)

securities which would not fall within any of sub-paragraphs (c) to (e) of paragraph (2),

if paragraph (6), or paragraph (6) as it applies with the modifications in paragraph (11), as the case may be, required the terms on which they were issued to be judged at the date when they first became investments of the trust, company or UCITS or, as the case may be, investments subject to the trusts of the scheme.

(9)

The condition specified in this paragraph is that not more than 50 per cent. in value of the investments subject to the trusts of the scheme are—

(a)

units in securities funds or warrant funds, or

(b)

shares in securities companies or warrant companies, or

(c)

units in, or shares of, a relevant UCITS,

where the fund, company or UCITS does not satisfy the condition in paragraph (8).

(10)

In paragraph (4)(a), “company” means any body corporate having a share capital.

(11)

The condition specified in this paragraph is the condition specified in paragraph (6), omitting sub-paragraph (b) of that paragraph and the word “or” after sub-paragraph (a).”