Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697805840735.pdf (Ireland)
Migration of Participating Securities Act 2019 Post Enactment Scrutiny Report December 2020 Prepared by: Financial Services Division Department of Finance www.gov.ie/finance Post Enactment Scrutiny Report Migration of Participating Securities Act 2019 Name: Migration of Participating Securities Act 2019 Date of enactment: 26 December 2019 Minister responsible for the Act: Minister for Finance Policy objectives of the Act On foot of the UK decision to leave the EU, the existing settlement facility - where Irish listed equities and Exchange Traded Funds (ETFs) are settled in the UK based Central Securities Depository (CSD) – will no longer be permissible as the UK will be a third country.
Faced with that issue, the market participants came forward with a solution based on a new CSD system operating in Belgium and are currently actively involved in migrating the existing system from the UK.

In this context, the Migration of Participating Securities Act 2019 facilitates the migration of Irish listed securities from the CSD operated by Euroclear UK & Ireland to Euroclear Bank Belgium by making technical amendments to the Companies Act 2014.
CSDs are specialist financial institutions that hold securities and facilitate trading between financial market operators.

CSDs are a vital and systemic part of market infrastructure that enable the effective functioning of settlement systems for stock exchanges.

Most countries have a domestically located CSD traditionally associated with their stock exchange.

However, due to the close historic links between the Dublin and London Exchanges, Ireland does not.
The Irish market instead uses a UK based CSD called Euroclear UK & Ireland which operates the CREST settlement system to settle Irish listed equities and Exchange Traded Funds (while Irish Government debt and corporate debt securities use Euroclear Belgium to settle).

The UK will become a ‘third country’ as a result of Brexit and the knock-on effects for settlement is a market issue that requires a market led solution as ultimately CSDs are private market operators.
Euronext Dublin (formerly the Irish Stock Exchange) announced in October 2018 that it would transfer the settlement of trades in Irish equities and other exchange traded instruments from the current UK operation to Euroclear Bank Belgium.

A range of legislative and non-legislative issues were identified and the Department of Finance and the Central Bank of Ireland have been actively involved with all stakeholders since the issue of migration was identified.
The —— 2 Post Enactment Scrutiny Report Migration of Participating Securities Act 2019 Migration of Participating Securities Act 2019 allows for the coordinated migration of the relevant Irish securities to a CSD based in the EU on a single day.

This measure will reduce the legal and administrative burden on issuers to effect migration individually.
Under the Act, it will be necessary for each relevant company to pass enabling resolutions at either its annual general meeting (AGM) or at an extraordinary general meeting (EGM).

The enabling resolutions must be in force by 31 March 2021.

Without this provision each corporate issuer would need to enter into a costly and time consuming scheme of arrangements process.
Update on the legislative context The Migration of Participating Securities Act 2019 will be utilised by industry in their migration from the existing UK based CSD (Euroclear UK & Ireland) to the proposed new market selected CSD based in Belgium.

The migration event is due to take place in March 2021 and at this time the Department of Finance has been assured that Irish corporate issuers are preparing for EGMs to formally secure the agreement of their shareholders to the migration.
As of December 2020 the migration project is still on track to conclude in March 2021.

Focus on implementation and any unintended consequences The legislation has been welcomed by industry bodies and will support them in the settlement migration process.

In order to facilitate an orderly migration, the European Commission has provided a temporary equivalence allowing for the existing system to continue during the first half of 2021.
In this context, it is envisaged that the migration of the system will be completed by end March 2021.

Evaluation Framework N/A Financial Implications None.

The Act has no impact on the stamp duties collected in respect of trading of Irish securities.

To the extent that the Act facilitates the smooth and orderly migration of Irish corporate securities it will ensure that stamp duty receipts continue to be collected from trading in these financial instruments.
—— 3 Post Enactment Scrutiny Report Migration of Participating Securities Act 2019 Conclusion This technical Act will be utilised by Irish Corporate issuers and will support the CSD migration in 2021 after which time the provisions of the Act will expire.

ENDS —— 4 Tithe an Rialtas.

Sráid Mhuirfean Uacht, Baile Átha Cliath 2, D02 R583, Éire Government Buildings, Upper Merrion Street, Dublin 2, D02 R583, Ireland T:+353 1 676 7571 @IRLDeptFinance www.gov.ie/finance —— 5