# The Uncertificated Securities Regulations 1992, Regulation 13: Commercial controllers Commercial controllers: authorisation and duties


(1) A commercial controller has authority to hold entitlements for a person other than himself or itself if, but only if, he or it has an agreement with that person to do so (in the case of entitlements to be held for two or more persons acting jointly, if he or it has such agreement with each such person) and that agreement:
(a) sets out the extent of the authority of the controller to deal with entitlements held for that person;
(b) provides for the form and manner in which any instructions for the purposes of any provision of these Regulations required by the terms of such authority are to be receivable by the controller; and
(c) appoints the controller as the agent of the account holder for the transmission of communications by means of the Operator’s part of the system relating to entitlements held or to be held for the account holder or the units of a security to which the entitlements relate (including communications with respect to any right, privilege or benefit attaching to, or arising from, such units).
(2) Subject to these Regulations (and in particular regulation 51), it is the duty of a commercial controller:
(a) to hold entitlements only for persons he or it is authorised to hold entitlements for; and
(b) upon:
(i) receiving actual notice that he or it holds an entitlement for a person he or it has no authority to hold entitlements for in circumstances where the con-troller has not consented to the transfer of the entitlement and the entitlement is not subject to an instruction of the kind referred to in regulation 34; and
(ii) failing to obtain authority from the person concerned within 5 working days of having received such notice,
forthwith to notify a transaction to the Operator under which the entitlement is to be transferred to a primary company controller (or to such other controller as the person concerned may have instructed under paragraph (3)) and to instruct that controller to hold the entitlement for the person concerned (for this purpose no instructions from the person concerned being required);
but any duty imposed by these Regulations on a commercial controller owed to an account holder is owed by him or it irrespective of whether he or it has authority to hold entitlements for that account holder.
(3) Subject to paragraph (2) and these Regulations, for as long as a commercial con-troller holds entitlements for an account holder he or it has no authority to hold for, it is the duty of the commercial controller:
(a) to act on the written instructions, and only on the written instructions, of the account holder in dealing with entitlements held for that account holder or otherwise for the purposes of any provision of these Regulations; and
(b) not to make any communications on behalf of the account holder unless he or it has been expressly authorised in writing to do so,
provided that the controller shall not act on any purported instruction, or authority to make a communication, unless signed by the account holder (in the case of two or more persons acting jointly, by each of them).
(4) An agreement between a commercial controller and one of the controller’s account holders entered into for the purposes of paragraph (1) shall be deemed to continue to exist, notwithstanding that the agreement may have terminated for any reason, until the controller has actual notice of its termination (whether on death or otherwise).
(5) A company or any other recipient, unless they have actual notice to the contrary with respect to a particular communication, shall be entitled and bound to treat any communication, given in the form of a valid communication, which is purportedly issued on behalf of the holder of a unit of a security or one of his or its account holders by a commercial controller as having being issued with the authority of the person on whose behalf it is purportedly issued, who shall be bound by the communication accordingly. This paragraph is without prejudice to the liability of the person so appointed for the making of a communication without authority, but it applies whether or not the holder of a unit or account holder concerned is identified in the communication, provided that the identity of the holder or account holder is, within such period as the recipient of the communication may reasonably require, notified to the recipient by the controller concerned.
(6) In addition a company, unless it has actual notice to the contrary, shall be entitled and bound to treat any commercial controller who has instructed the registration of a person as the holder of units of a security of a company as having the authority to hold, for that person, entitlements to any units of a security of the company to be issued or transferred to the person by reference to the units with which he is registered.
(7) Notwithstanding any provision to the contrary in an agreement made for the purposes of paragraph (1) (but in addition to any other means provided therein for the termination of the agreement), an account holder has the right, without penalty (but subject to any reasonable charges and any accrued liabilities), to send a notice in writing to his commercial controller terminating the controller’s authority to hold entitlements for the account holder. Such a notice shall have no effect on any instructions already given by the account holder to the controller.

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Source: https://www.legislation.gov.uk/uksi/1992/225/regulation/13 (the official version)
Page: https://openlegislation.uk/uncertificated-securities-regulations-1992/regulation-13
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.