Certificate representing certain securities - COBS Provision

The JC’s Reg and Leg resource™ UK Edition Go Premium Section Certificate representing certain securities, COBS Rules COBS Rules Certificate representing certain securities: the investment specified in article 80 of the Regulated Activities Order (Certificates representing certain securities), which is in summary: a certificate or other instrument which confers contractual or property rights (other than rights consisting of options): (a) in respect of any share, debenture, alternative debenture, government and public security or warrant held by a person other than the person on whom the rights are conferred by the certificate or instrument; and (b) the transfer of which may be effected without requiring the consent of that person; but excluding any certificate or other instrument which confers rights in respect of two or more investments issued by different persons or in respect of two or more different government and public securities issued by the same person. View Template Index: Click ᐅ to expand: Regulation Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

So I am going to take this one really slowly,. because it's a proper Zodiac Mindwarp. The JC came to this to answer the question “Do the CASS 6 rules apply to certificated, physical share certificates, which evidences ownership of the share in question but does not comprise it?”

At first I thought the answer was “no”, then I thought it might be “yes”, and now I just don’t know. So let’s walk through this slowly.

“a certificate or other instrument”...

Is a share certificate a “certificate”? Well you’d think so — but what of this “or other instrument”? That implies not just any old certificate, but one that qualifies also as some kind of “instrument”. Otherwise you wouldn't need that modified “other”. To this old lag’s ears, “instrument” means some kind of financial instrument being the thing “in rem”, in and of itself, as opposed to a piece of paper talking about a financial instrument.

But, safety first: let’s be cautious, and say our non-title conferring share certificate is in scope. Just in case.

... which confers contractual or property rights (other than rights consisting of options) (a) in respect of any share [...] ...

The share certificate does not confer property rights. They is conferred by the register of shareholders. Does a share certificate of itself confer other contractual rights with respect to the shares? What could these rights be, if not options of some kind or another with regard to the share?

... held by a person other than the person on whom the rights are conferred by the certificate or instrument...

and

(b) the transfer of which may be effected without requiring the consent of that person; but excluding any certificate or other instrument which confers rights in respect of two or more investments issued by different persons or in respect of two or more different government and public securities issued by the same person.