Section 663 | Transfers without accrued interest to makers of manufactured payments

(1)This section applies if—

(a)the manufactured payments conditions are met (see section 647(2)), and

(b)the nominal value of the securities subject to the seller's contract is less than that of the securities transferred to the seller.

(2)The amount of the payment treated as made to the seller under section 633 on the transfer of the securities to the seller is reduced.

(3)The reduction is by so much of that amount as is attributable to securities (“the matched securities”) of a nominal value equal to that of the securities subject to the seller's contract.

(4)If there is more than one transfer of securities to the seller, those transferred to the seller earlier are treated as the matched securities before those transferred later.

(5)In this section “the seller” and “the seller's contract” have the same meaning as in section 647.

(6)For cases where subsection (1)(b) does not apply, see section 647(3) (under which the seller is treated as an excluded transferee).