Transferable security | Practical Law

Transferable security | Practical Law

Transferable security

Transferable security

Practical Law UK Glossary 9-200-9278 (Approx. 5 pages)

Glossary

Transferable security

Those classes of securities which are negotiable on the capital market (except instruments of payment). For example:
  • Shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares. Depositary receipts being securities which represent ownership of the securities of a non-domiciled issuer while being able to be admitted to trading on a UK regulated market and traded independently of the securities of the non-domiciled issuer.
  • Bonds or other forms of securitised debt, including depositary receipts in respect of such securities.
  • Any other securities giving the right to acquire or sell any such securities or giving rise to a cash settlement determined by reference to such securities, currencies, interest rates or yields, commodities or other indices or measures.
(Article 2(1)(24)(25), UK MiFIR.)
For the purposes of the Companies Act 2006, "transferable securities" has the meaning given by Article 2(1)(24) of UK MiFIR (section 1173, CA 2006).
For the purposes of Part VI of Financial Services and Markets Act 2000 (FSMA), "transferable securities" means anything which is a transferable security for the purposes of UK MiFIR other than money-market instruments for the purposes of UK MiFIR which have a maturity of less than 12 months (section 102A(3), FSMA). "Money-market instruments" are those classes of instruments which are normally dealt with on the money market, for example treasury bills, certificates of deposit and commercial papers and excluding instruments of payment (Article 2(1)(25A), UK MiFIR). The Listing Rules (LR), Prospectus Regulation Rules (PRR) and Disclosure Guidance and Transparency Rules (DTR) apply this definition.
When considering this term in the context of financial services, reference should be made to the FCA Handbook glossary definition of transferable security.