Company Law Bill [HL]

moved Amendment No. A113:"Page 285, line 41, leave out subsection (2)." The noble Lord said: Again, we are touching on the existing requirements of Section 207 of the 1989 Act. The purpose of the amendment is to preserve the protections that the provisions in that Act provide in relation to regulations on the transfer of securities. Subsection (2) removes some of the existing requirements from Section 207(4), and that Act says that any regulations,"““shall be framed so as to secure that the rights and obligations in relation to securities dealt with under the new procedures correspond, so far as practicable, with those which would arise apart from any regulations under this section””." It is not thought by practitioners that that has caused real problems in practice in the current system, partly because there is always the carve-out language of ““so far as practicable””, which can be relied on. There is some sympathy with the Government’s concern presumably that this provision could cause difficulties in relation to any new system, but that does not justify simply removing the provision rather than amending or replacing it, because it provides an essential protection for holders of securities under any new system. This is particularly so if the new system is designed to be compulsory. Clearly, this is a probing amendment, and the concern could be dealt with by replacing a reference to the rights ““corresponding”” to existing rights with the reference to the regulations being framed so as to ensure that the rights and obligations in relation to securities dealt with under the new system which would arise apart from any regulations under this section are protected. The point of principle is that it is important that basic company law rights set out in the Companies Act and the Company Law Reform Bill are not overridden by the regulations permitted under this provision. I beg to move.