Finance Bill 2002: EXPLANATORY NOTE
CLAUSE 137: ADMINISTRATION OF UK GILTS
SUMMARY
1. Clause 137 enables the Treasury to appoint, in the future, an operator or operators other than the Banks of England and Ireland to provide registration services for UK government stock.
DETAILS OF THE CLAUSE
2. Subsection (1) gives the Treasury legal authority to decide which operator or operators to appoint for the registration of UK government stock, and to determine the terms on which they are appointed.
3. Subsection (2) allows the Treasury to use secondary legislation to amend, as necessary, any existing legislation, in the event that a new operator is appointed. This will permit the removal of legal references to the Banks of England and Ireland.
4. Subsection (3) ensures that subsection (2) includes amendments to both primary and secondary legislation.
5. Subsection (4) explains the Parliamentary procedure that amendments to legislation under subsection (2) must follow.
6. Subsection (5) determines that payment for registration services shall continue to be met by the National Loans Fund, with recourse to the Consolidated Fund, no matter who the Treasury appoints in the future.
7. Subsection (6) allows the Treasury to use secondary legislation to claim the legal authority to appoint any operator when it chooses, at some point in the future.
BACKGROUND
2. The Bank of Ireland has made a commercial decision to relinquish its role as a registrar. The government has therefore decided to close the Dublin and Belfast registers, operated by the Bank of Ireland and transfer the holdings onto the much larger Gloucester register, operated by the Bank of England. The Bank of England will become the sole registrar of UK government stock.
9. To ensure that, subject to security considerations, the taxpayer receives the best value for money from the arrangements for registration of UK government stock, the Treasury plans to put the whole registration business out to tender. If the Bank of England does not make a winning bid, then the Treasury needs the power to appoint a new operator or operators.