Section 656 | Power to modify: non-standard sale and repurchase arrangements

(1)The Treasury may by regulations provide for section 655 to apply with modifications in relation to cases involving non-standard sale and repurchase arrangements.

(2)A case involves a non-standard sale and repurchase arrangement if—

(a)there is a sale and repurchase arrangement in respect of securities,

(b)T makes a sale of the securities under the agreement to sell them (“the original sale”),

(c)the securities are UK shares, UK securities or overseas securities, and

(d)any of conditions A to E is met in relation to the sale and repurchase arrangement.

(3)Condition A is that—

(a)the obligation to buy back the securities is not performed, or

(b)the option to buy them back is not exercised.

(4)Condition B is that provision is made by or under an agreement for different or additional UK shares, UK securities or overseas securities to be treated as (or as included with) representative securities.

(5)Condition C is that provision is made by or under an agreement for any UK shares, UK securities or overseas securities to be treated as not included with representative securities.

(6)Condition D is that provision is made by or under an agreement for the sale price or repurchase price to be decided or varied wholly or partly by reference to post-agreement fluctuations.

(7)Condition E is that provision is made by or under an agreement for a person to be required, in a case where there are post-agreement fluctuations, to make a payment in the period—

(a)beginning immediately after the making of the agreement for the original sale, and

(b)ending when the repurchase price becomes due.

(8)“Post-agreement fluctuations” are fluctuations in the value of —

(a)securities transferred in pursuance of the original sale, or

(b)representative securities,

which occur in the period after the making of the agreement for the original sale.

(9)“Representative securities” are UK shares, UK securities or overseas securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale.