Company Law Reform Bill [HL]

This clause retains an existing exemption to the general prohibition, retained in Clause 127, on a company owning shares in its own holding company. The exemption is in the circumstance that the shares are held by the subsidiary in the ordinary course of its business as a dealer in securities. The intention is to ensure that intermediaries who deal in securities, as defined, are not inhibited from dealing in the course of business by the general prohibition on a subsidiary holding share in its own holding company. I am not certain that I can take the noble Lord by the hand and guide him exactly through this clause, but perhaps I can tell him about its historical origins. Most of this clause dates back to 1997, when the provisions were substituted by the Companies (Membership of Holding Company) (Dealers in Securities) Regulations 1997—Statutory Instrument 1007/2306. The exception is subsection 3(BA), which was a consequential amendment made following the Financial Services and Markets Act 2000. Arguably, the title ““authorised dealer in securities”” is misleading. The clause is self-standing and I do not think that it is dependent on the Financial Services and Markets Act definition.