Section 654 | Sale and repurchase arrangements

(1)This section applies for the purposes of sections 655 to 658.

(2)There is a sale and repurchase arrangement in respect of securities if the securities are transferred under an agreement to sell them and—

(a)the transferor (“T”) or a person connected with T is required to buy back the securities by the agreement or a related agreement,

(b)T or a person connected with T is required to buy back the securities as a result of the exercise of an option acquired under the agreement or a related agreement, or

(c)T or a person connected with T exercises an option to buy back the securities which was acquired under the agreement or a related agreement.

(3)Agreements are related for the purposes of this section if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).

(4)References in this section to buying back securities include—

(a)buying similar securities, and

(b)in the case of a person connected with T, buying the securities sold by T or similar securities.

(5)Subsection (4) applies even if the person buying the securities has not held them before.

(6)References in sections 656 and 657 to repurchase are to be read accordingly.

(7)Securities are similar for the purposes of subsection (4) if they give their holders—

(a)the same rights against the same persons as to capital and interest, and

(b)the same remedies to enforce those rights.

(8)Subsection (7) applies even if there is a difference in—

(a)the total nominal amounts of the securities,

(b)the form in which they are held, or

(c)the manner in which they can be transferred.