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**As filed with the Securities and Exchange Commission on June 29, 2007**  **SECURITIES AND EXCHANGE COMMISSION****Washington, DC 20549****FORM 20-F**(MARK ONE)   o **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THESECURITIES EXCHANGE ACT OF 1934 *(FEE REQUIRED)**OR**   þ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006*(NO FEE REQUIRED)**OR**   o **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO *(NO FEEREQUIRED)*** o **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**   **Date of event requiring this shell company report: N/A****Commission file numbers 000-50247****Gracechurch Card Funding (No. 2) PLC**(Exact name of Registrants as specified in their charters)**England and Wales**(State or other jurisdiction of incorporation or organization)**1 Churchill Place****London E14 5HP****United Kingdom****44-(0)207-699-5000****Barclaycard Funding PLC**(Exact name of Registrants as specified in their charters)**England and Wales**(State or other jurisdiction of incorporation or organization)**1 Churchill Place****London E14 5HP****United Kingdom****44-(0)207-699-5000****GracechurchReceivables Trustee Limited**(Exact name of Registrants as specified in their charters)**Jersey, Channel Islands**(State or other jurisdiction of incorporation or organization)**26 New Street****St. Helier****Jersey JE2 3RA****44-1534-814814**(Address of Principal Executive Offices)Securities registered or to be registered pursuant to Section 12(b) of the Act: **None**Securities registered or to be registered pursuant to Section 12(g) of the Act: **None**Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:   **Title of Class** **Name of Each Exchange on Which Registered****$900,000,000 Class A Floating RateAsset-Backed Notes**(1)  **None**   **$50,000,000 Class B Floating RateAsset-Backed Notes**(1)  **None**   **$50,000,000 Class C Floating RateAsset-Backed Notes**(1)  **None**   **Medium Term Note Certificate**(2) **None**   **Investor Certificate**(3)  **None**Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act.Yes o       No þIf this report is an annual or transition report, indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.Yes o       No þNote — Checking the box above will not relieve any registrant required to file reports pursuant toSection 13 or Section 15(d) of the Securities Exchange Act of 1934 from their obligations underthose sections.Indicate by check mark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.Yes þ       No oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer ora non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule12b-2 of the Exchange Act. (Check one):Large accelerated filer o            Accelerated filer o           Non-accelerated filer þIf this is an annual report, indicate whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).Yes o No þ(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to befiled by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to thedistribution of securities under a plan confirmed by a court.N/AIndicate by check mark which financial statement item the registrants have elected to follow.Item 17 o       Item 18 o       Incorporated by Reference to filings on Form 6-K þ(1) Gracechurch Card Funding (No. 2) PLC is the registrant for the Class A Notes, the Class B Notes and the Class C Notes. (2) Barclaycard Funding PLC is the registrant for the Medium Term Note Certificate. (3) Gracechurch Receivables Trustee Limited is the registrant for the Investor Certificate.  
 

 
**TABLE OF CONTENTS**       **Page**Item 1. Identity of Directors, Senior Management and Advisers  2 Item 2. Offer Statistics and Expected Timetable  2 Item 3. Key Information  2 Item 4. Information on the Company  12 Item 5. Operating and Financial Review and Prospects  14 Item 6. Directors, Senior Management and Employees  14 Item 7. Major Shareholders and Related Party Transactions  15 Item 8. Financial Information  16 Item 9. Offer and Listing Details  16 Item 10. Additional Information  16 Item 11. Quantitative and Qualitative Disclosures About Market Risk  22 Item 12. Description of Securities Other than Equity Securities  22 Item 13. Defaults, Dividend Arrearages and Delinquencies  23 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds  23 Item 15. Controls and Procedures  23 Item 16A. Audit Committee Financial Expert  23 Item 16B. Code of Ethics  23 Item 16C. Principal Accountant Fees and Services  23 Item 16D Exemptions from the Listing Standards for Audit Committees  23 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.  23 Item 17. Financial Statements  23 Item 18. Financial Statements  23 Item 19. Exhibits  23 Index to Exhibits  25  Exhibit 12.1 Exhibit 12.2 Exhibit 12.3 Exhibit 13.1 Exhibit 13.2 Exhibit 13.3 Exhibit 99.1 Exhibit 99.2Gracechurch Card Funding (No. 2) PLC is referred to as the “Company”.     This Annual Report on Form 20-F relates to: **•** Gracechurch Card Funding (No. 2) PLC and the $900,000,000 Class A Floating RateAsset-Backed Notes, the $50,000,000 Class B Floating Rate Asset-Backed Notes and the$50,000,000 Class C Floating Rate Asset-Backed Notes (collectively, the “Notes”) issuedpursuant to a trust deed dated October 24, 2002 (the “Trust Deed”), between the Company andThe Bank of New York, as note trustee.  **•** Gracechurch Receivables Trustee Limited (the “Receivables Trustee”) and the receivablestrust, the property of which includes all present and future receivables arising under allMasterCard and VISA credit and charge card accounts of individual cardholders originated bythe Barclaycard business unit of Barclays Bank PLC that have not been identified asnon-designated accounts and that are denominated in pounds sterling with a billing addresswithin England, Wales, Scotland, Northern Ireland or a permitted additional jurisdiction ora restricted additional jurisdiction. The Receivables Trustee was formed under the laws ofJersey, Channel Islands on September 29, 1999. All of the issued share capital of theReceivables Trustee is held by nominees of a trust company formed in Jersey, Bedell CristinTrustees Limited, on the terms of a general charitable trust.  **•** Barclaycard Funding PLC (the “Medium Term Note Issuer”) which purchased an investorcertificate (the “Investor Certificate”) pursuant to the Series 02-1 MTN Supplement, datedOctober 24, 2002, between the MTN Issuer and The Bank of New York, as security trustee (the“Series 02-1 MTN Supplement”) and issued the Series 02-1 medium term note certificate (the“Series 02-1 MTN Certificate”) pursuant to a security trust and cash management deed, datedNovember 23, 1999 as supplemented by the Series 02-1 MTN Supplement.     Capitalized terms used herein and not defined have the same meaning ascribed to such terms inthe registration statement on Form F-1 for the Notes filed with the Securities and ExchangeCommission on September 26, 2002 and amended by pre-effective amendments on October 4, 2002 andOctober 11, 2002 (the “Registration Statement”).     The information required for some items in Form 20-F is “not applicable” to the Company, theMTN Issuer, and the Receivables Trustee. As used in this Annual Report filed on Form 20-F, “notapplicable” means that the response to the referenced item is not required for Asset-Backed Issuersor in annual reports pursuant to SEC rules.
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**PART I****Item 1. Identity of Directors, Senior Management and Advisers**     Not required for Asset-Backed Issuers or in annual reports pursuant to SEC rules.**Item 2. Offer Statistics and Expected Timetable**     Not Applicable.**Item 3. Key Information****Selected Financial Data**     The registrants incorporate by reference the following monthly Trust Cash Manager’s Reports,filed on Form 6-K, which include all financial information relating to the registrants that isrelevant to noteholders:     Monthly Trust Cash Manager’s Reports for the monthly periods ending:     January 31, 2006, February 28, 2006, March 31, 2006, April 30, 2006, May 31, 2006, June 30,2006, July 31, 2006, August 31, 2006, September 30, 2006, October 31, 2006, November 30, 2006 andDecember 31, 2006.**Capitalization and Indebtedness**     Not Applicable.**Reasons for the Offer and Use of Proceeds**     Not Applicable.**Risk Factors**     You should carefully consider the following risk factors before deciding to invest in theNotes offered. Additional risks and uncertainties not presently known to the Company may alsoimpair your investment.***Allocations of Charged-Off Receivables Could Reduce Your Payments***     We anticipate that the servicer will charge off or write off as uncollectible some of thereceivables. Each class of investor interest in the receivables trust will be allocated a portionof those charged-off receivables. If the amount of charged-off receivables allocated to theinvestor interest exceeds the amount of funds available to cover those charge-offs, the investorinterest will be reduced. This could cause the holders of the Notes to not receive the full amountof principal and interest due to them. Any loss will be borne by the noteholders in the order ofsubordination of the Notes, with the class C Notes bearing the first losses, followed by the classB Notes and finally the class A Notes.***The Class B Notes and the Class C Notes Bear Additional Risk Because They Are Subordinated***     The class B Notes are subordinated in right of payment of principal and interest to the classA Notes. Principal payments to the class B noteholders will not be made until the class Anoteholders are paid in full. On each payment date interest is paid to the class A noteholdersbefore payments of interest are made to the class B noteholders. This could cause the class Bnoteholders not to receive the full amount of principal or interest due to them.     The class C Notes are subordinated in right of payment of principal and interest to the classA Notes and the class B Notes. Principal payments to the class C noteholders will not be made untilthe class A noteholders and the class B noteholders are paid in full. On each payment date interestis paid to the class A noteholders and the class B noteholders before payments of interest are madeto the class C noteholders. This could cause the class C noteholders not to receive the full amountof principal or interest due to them.***Inability of Noteholders to Receive the Full Percentage Allocation of Principal Collections Duringthe Regulated Amortisation Period Could Delay Payments on Your Notes or Cause a Loss on Your Notes***     Some pay out events will cause the start of the regulated amortisation period rather than therapid amortisation period. During a regulated amortisation period, not all of the principalcollections allocated to the investor interest may be used to make payments of principal to the MTNIssuer as they would be during a rapid amortisation period. Instead, principal payments to the MTNIssuer – and thus ultimately on your Notes – will be limited to the controlled deposit amount. Thiscould cause you to receive payments of principal more slowly than you would during a rapidamortisation period. Since some of the pay out events that result in the start of a regulatedamortisation period are caused by a deterioration in the performance of the receivables, a delay inthe principal payments on your Notes could expose you to an increased risk of losses on your Notesor a delay in payment on your Notes.
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***Grouping of the MTN Issuer with Barclays for Tax Purposes Could Jeopardise the Bankruptcy RemoteStatus of the MTN Issuer Causing an Early Redemption of Your Notes or a Loss on Your Notes***     Contractual provisions are contained in the security trust deed and MTN Issuer cash managementagreement and the other agreements to which the MTN Issuer is a party by which the other parties tothose agreements agree not to take any actions against the MTN Issuer that might lead to itsbankruptcy. Furthermore, the MTN Issuer is contractually restricted from undertaking any businessother than in connection with the financings. In particular, the MTN Issuer is expressly prohibitedfrom incurring any additional indebtedness, having any employees, owning any premises andestablishing or acquiring any subsidiaries. Together, these provisions ensure that the likelihoodof the            MTN Issuer becoming insolvent or bankrupt is remote.     Notwithstanding the steps that have been and may be taken to ensure that the insolvency of theMTN Issuer will be remote, the MTN Issuer is included in the Barclays Group registration for VATpurposes. As a company included in that group registration, broadly, it will be liable, on a jointand several basis with all other companies in the VAT group registration, for the VAT liability ofthe representative member of the VAT group – Barclays Bank PLC – arising only during the MTNIssuer’s period of membership. Accordingly, these secondary liabilities for VAT could increase thelikelihood of the MTN Issuer becoming insolvent. In addition, there are provisions in the UK taxcode that are designed to enable the UK HM Revenue and Customs to collect corporation tax from onemember of a group where another member of the group has failed to discharge certain taxes due andpayable by it within a specified time period. (and the definition of “group” for these purposeswould not necessarily be confined to the Barclays Group).     If the MTN Issuer were required to pay any VAT due from the representative member of theBarclays VAT group or to become liable for corporation tax liabilities of another member in theBarclays Group, which the MTN Issuer was unable to meet, the UK HM Revenue and Customs could seekto put the MTN Issuer into insolvency. This could cause an early redemption of your Notes or a losson your Notes.***Issuance of Additional Series May Adversely Affect Your Rights by Diluting Your Voting Power***     The MTN Issuer has issued twelve series (of which six remain outstanding as series 99-1 wasrepaid in November 2002, series 03-2 in June 2006, Series 03-3 in August 2006 and Series 04-1 inFebruary 2007 ) and may issue additional series of medium term notes or certificates in connectionwith the issuance of other series of investor certificates. The holder of the medium term notes orcertificates of each series – including the Company – may require the MTN Issuer, as investorbeneficiary, to take action or direct actions to be taken under the declaration of trust and trustcash management agreement or a supplement. However, the consent or approval of holders of apercentage of the total principal balance of the medium term notes or certificates of all seriesmight be necessary to require or direct those actions. These actions include terminating theappointment of the servicer under the beneficiaries servicing agreement or the trust cash managerunder the declaration of trust and trust cash management agreement. Thus, the holder of any newseries of medium term notes or certificates will have voting rights that will reduce the percentageinterest of the Company as holder of a medium term note certificate. Holders of medium term notesor certificates of other series – or persons with the power to direct their actions – may haveinterests that do not coincide with the interests of the Company – or the persons with the power todirect the Company. This may restrict your ability to ultimately direct the MTN Issuer to take theactions referred to above.***Insolvency of the Transferor May Result in an Inability to Repurchase Receivables***     None of the MTN Issuer, the receivables trustee or the Company has undertaken or willundertake any investigations, searches or other actions to verify the details of the receivables –other than steps taken by the Company to verify the details of the receivables– or to establish thecreditworthiness of any cardholder on the designated accounts. The MTN Issuer, receivables trusteeand the Company will rely solely on the representations given by the transferor to the receivablestrustee about the receivables, the cardholders on the designated accounts, the designated accountsand the effect of the assignment of the receivables.     If any representation made by the transferor about the receivables proves to have beenincorrect when made, the transferor will be required to repurchase the affected receivables fromthe receivables trustee. If the transferor becomes bankrupt or insolvent, the receivables trusteemay be unable to compel the transferor to repurchase receivables, and you could incur a loss onyour Notes or an early redemption of your Notes.***Insolvency of the Company, the MTN Issuer or the Receivables Trustee Could Cause an EarlyRedemption of Your Notes or a Loss on Your Notes***     The ability of each of the Company, the MTN Issuer and the receivables trustee to meet itsobligations under the notes, the medium term note certificates and the receivables securitisationagreement and the declaration of trust and trust cash management agreement will depend upon theircontinued solvency.     A company that has assets in the United Kingdom will be insolvent if its liabilities exceedits assets or if it is unable to pay its debts as they fall due. Each of the Company, the MTNIssuer and the receivables trustee have been structured so that the likelihood of their becominginsolvent is remote. Each of these entities is contractually restricted from undertaking anybusiness other than in connection with the financings. They each are expressly prohibited fromincurring any additional indebtedness, having any employees, owning any premises and establishingor acquiring any subsidiaries. Contractual provisions are contained in each of the agreements otherthan your Notes, to which each of these entities is a party which will prohibit the other partiesto those agreements from taking any actions against these entities that might lead to theirinsolvency. Together, these provisions help ensure that the likelihood of any of these entitiesbecoming insolvent or bankrupt is remote.     Notwithstanding these actions, it is still possible that the Company, the MTN Issuer or thereceivables trustee could become insolvent. If this were to occur, you could suffer a loss on yourNotes or an early redemption of your Notes.
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***Application of the Consumer Credit Act 197, as amended by the Consumer Credit Act 2006, 4 MayImpede Collection Efforts and Could Cause Early Redemption of your Notes or a Loss on your Notes***     There is an increasing volume of legislation devoted to dealing with consumer credit in theUnited Kingdom. Of particular importance are the Consumer Credit Act 1974, as amended by theConsumer Credit Act 2006 (the “Consumer Credit Act”) and the related Unfair Terms in ConsumerContracts Regulations 1999 and Consumer Credit (Cancellation Notices and Copies of Documents)Regulations 1983, as amended (together, the “Regulations”)). The Consumer Credit Act andRegulations are administered by, amongst others, the Office of Fair Trading (the “OFT”). TheConsumer Credit Act and Regulations apply, in whole or in part, to the transactions occurring onthe designated accounts and to the credit or charge card agreements. The effect of the applicationof the Consumer Credit Act and the Regulations on the relevant underlying charge card agreementsmay result in adverse consequences for your investment in the notes, because of the possibleunenforceability of, or possible liabilities for misrepresentation or breach of contract inrelation to, an underlying credit or charge card agreement.     As is common with many other UK credit card issuers, some of Barclaycard’s credit and chargecard agreements do not comply in all respects with the Consumer Credit Act, the Regulations orother related legislation.     In addition, Barclaycard, in common with many other UK credit card issuers, has received andexpects to continue to receive correspondence from and to have discussions with, the OFT inrelation to concerns the OFT may raise from time to time in respect of compliance of Barclaycard’scredit and charge card agreements with the Consumer Credit Act, the Regulations or other relatedlegislation, or any other concerns that the OFT may have in respect of Barclaycard’s credit andcharge card agreements or Barclaycard’s advertising, marketing or administration thereof.     If a credit or charge card agreement has not been executed or modified in accordance with theConsumer Credit Act, it may be unenforceable against a cardholder without a court order**.**Thetransferor gives no guarantee that a court order could be obtained if required. The Consumer CreditAct has been amended by the introduction of a concept of an “unfair relationship” from April 2007.If a lender is found to have conducted such a relationship with a borrower, the borrower may applyto the court for the waiver of its debts to the borrower and the court has jurisdiction to waivethe repayment obligation.     With respect to those credit or charge card agreements which may not be compliant, such that acourt order would not be obtained, the transferor estimates that this would apply to less than 1per cent. of the aggregate principal receivables in the designated accounts on December 31, 2006.Barclaycard does not anticipate any material increase in the percentage of these receivables in thesecuritised portfolio. The accounts that do not comply with the Consumer Credit Act or Regulationsare still legal, valid and binding obligations of the cardholder and it will still be possible tocollect payments and demand arrears from cardholders who are falling behind with their payments.The transferor will have no obligation to repay or account to a cardholder for any paymentsreceived by a cardholder because of this non-compliance with the Consumer Credit Act orRegulations. However, if losses arise on these accounts, they will be written off and borne by theinvestor beneficiary and transferor beneficiary based on their interests in the receivables trust.Accordingly, if this were to occur, you could suffer a loss on your Notes or an early redemption onyour Notes.     Transactions involving the use of a credit card in the United Kingdom may constitutetransactions under debtor-creditor supplier agreements for the purposes of section 75 of theConsumer Credit Act. A debtor-creditor-supplier agreement includes an agreement by which thecreditor, with knowledge of its purpose, advances funds to finance the debtor’s purchase of goodsor services from a supplier.     Section 75 of the Consumer Credit Act provides that if a supplier breaches a contract betweenthe supplier and a cardholder in a transaction under certain debtor-creditor-supplier agreements,or if the supplier makes a misrepresentation about the contract, the creditor may also be liable tothe cardholder for the breach or misrepresentation. An example of a supplier’s breach of contractwould include the supplier selling the cardholder merchandise that is defective or unsuitable forits purpose. In these circumstances, the cardholder may have the right to reduce the amount owed tothe transferor under his or her credit or charge card account. This right would survive the sale ofthe receivables to the receivables trustee. As a result, the receivables trustee may not receivethe full amount otherwise owed by a cardholder. However, the creditor will not be liable where thecash price of the item or service supplied underlying the claim is £100 or less, or greater than£30,000.     The receivables trustee has agreed on a limited recourse basis to indemnify the transferor forany loss suffered by the transferor from a cardholder claim under section 75 of the Consumer CreditAct. This indemnity cannot exceed the original outstanding principal balance of the affectedcharges on a designated account.     The receivables trustee’s indemnity will be payable only from and to the extent of excessspread on the receivables. Any amounts that the transferor recovers from the supplier will reducethe transferor’s loss for purposes of the receivables trustee’s indemnity. The transferor will haverights of indemnity against suppliers under section 75 of the Consumer Credit Act. The transferormay also be able to charge-back the transaction in dispute to the supplier under the operatingregulations of VISA or MasterCard.     If the transferor’s loss for purposes of the receivables trustee’s indemnity exceeds theexcess spread available to satisfy the loss, the transferor interest in the receivables trust willbe reduced by the amount of the excess loss.     Satisfaction by the receivables trustee of any such indemnity payment (as described above)could have the effect of reducing or eliminating excess spread which might otherwise have beenavailable to the MTN Issuer. These consequences could result in you incurring a loss on yourinvestment or an early redemption of your Notes.***Department of Trade and Industry (“DTI”) White Paper dated December 2003 in Connection with itsReview of Consumer Credit***     In its White Paper dated December 2003, the DTI, the UK Government department responsible forconsumer credit, indicated that the Government proposed to take various actions to address mattersof concern to it in this area. Since then a number of changes have been made by subordinatelegislation under the Consumer Credit Act and further legislative changes are coming into effect inApril and October 2007 and again in April and October 2008.
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***Consumer Credit Regulations made since the DTI published its White Paper in December 2003***     Two sets of regulations that are particularly pertinent to Barclaycard were made during 2004pursuant to the Consumer Credit Act. The Consumer Credit (Advertisements) Regulations 2004(“Advertisements Regulations”) were made in June 2004 and came into force on October 31, 2004. Theyreplaced regulations made in the period 1989-2000 in relation to the advertising of consumercredit. The Consumer Credit (Agreements) (Amendment) Regulations 2004 (“Agreements Regulations”)were made in June 2004 and came into force on May 31, 2005.***The Advertisements Regulations***     The Advertisements Regulations contain a new statutory regime governing the content ofmarketing materials that promote consumer credit. The Advertisements Regulations require everycredit advertisement to be made in plain and intelligible language, be easily legible or clearlyaudible as the case may require and specify the name of the advertiser. The AdvertisementsRegulations prescribe information that has to be included in a credit advertisement. In addition,the Advertisements Regulations provide certain assumptions which must be applied when calculating atotal charge for credit and prescribe the manner in which the total charge for credit and anystated annual percentage rate must be disclosed. The possible unenforceability of, or possibleliabilities for misrepresentation or breach of contract, in relation to an underlying credit orcharge card agreement may result in unrecoverable losses on accounts to which such agreementsapply. If losses arise on these accounts, they will be written off and borne by the investorbeneficiary and transferor beneficiary based on their interests in the receivables trust.Accordingly, if this were to occur, you could suffer a loss on your Notes or an early redemption onyour Notes.***The Agreements Regulations***     The Agreements Regulations amend the Consumer Credit (Agreements) Regulations 1983 (“the 1983Regulations”). The Agreements Regulations set out the order in which the prescribed content ofdocuments comprising a credit or charge card agreement (including any variations to such agreementswhich create a modifying agreement under section 82(3) of the Consumer Credit Act) is to be givenand the place of the signature and separate boxes required under the 1983 Regulations and theAgreements Regulations. An additional form of consent is required by the Agreements Regulationswhere a cardholder purchases certain insurance products on credit. In common with theAdvertisements Regulations, the Agreements Regulations contain new prominence and legibilityrequirements and new requirements in relation to the calculation and description of an annualpercentage rate.     The possible unenforceability of, or possible liabilities for misrepresentation or breach ofcontract, in relation to an underlying credit or charge card agreement may result in unrecoverablelosses on accounts to which such agreements apply. If losses arise on these accounts, they will bewritten off and borne by the investor beneficiary and transferor beneficiary based on theirinterests in the receivables trust. Accordingly, if this were to occur, you could suffer a loss onyour Notes or an early redemption on your Notes.***Consumer Credit Act received Royal Assent in March 2006***     An Act to amend the Consumer Credit Act (the “2006 Act”) became law in March 2006. Theprovisions of the 2006 Act and related implementing regulations are coming into effect between June2006 and October 2008.     The 2006 Act, when implemented, will, inter alia give effect in the Consumer Credit Act aconcept of an “unfair relationship”. This is broadly defined in the 2006 Act and (should anapplication be made under these provisions) a court would be entitled to look at any aspect of acredit relationship in order to determine whether unfairness exists. Under the 2006 Act amendments,remedies would include requiring the creditor to pay back sums to the debtor that had previouslybeen paid by the debtor to the creditor. These provisions of the 2006 Act amendments are intendedto apply to all credit agreements regardless of when entered into with the exception of agreementsmade before the commencement of the provisions and which are completed before the end of anytransitional period which is specified..     The 2006 Act will also extend the ombudsman scheme under the Financial Services and MarketsAct 2000 to licensees under the Consumer Credit Act. The extension of the ombudsman scheme willallow a cardholder who has a complaint to raise it with the ombudsman, provided that the complaintfalls within the consumer credit jurisdiction conferred upon the ombudsman.     The possible unenforceability of, or possible liabilities for misrepresentation or breach ofcontract, in relation to an underlying credit or charge card agreement may result in unrecoverablelosses on accounts to which such agreements apply. If losses arise on these accounts, they will bewritten off and borne by the investor beneficiary and transferor beneficiary based on theirinterests in the receivables trust. Accordingly, if this were to occur, you could suffer a loss onyour Notes or an early redemption on your Notes.***Second EU Directive Relating to Consumer Credit***     In May 2007, an agreement was reached at a meeting of the Competitiveness (Internal Market,Industry and Research) Council (an adjunct of the European Council of Ministers), concerning aproposal for a second EU directive relating to consumer credit. It was agreed that this new EUdirective should provide for the adoption of common provisions for consumer credit documentation inall EU member states. As such, it will constitute a substantial piece of harmonisation in thesingle European market for retail financial services. The next step is for the EU Parliament todecide whether it wishes to adopt the proposed Directive in this form or propose amendments to it.The Directive is expected to achieve its finally settled text in the second half of 2007, afterwhich there will normally be a two year period for EU member states to implement the Directive intothe domestic law of each state.
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***EU Directive Concerning Unfair Commercial Practices***     Directive 2005/29/EC concerning unfair business to consumer commercial practices was made onMay 11, 2005. This is a directive of general application and is not confined to consumer credit orother financial services. The Directive will enter into UK Law and take effect in the UK in 2007.The directive is intended to achieve a high level of consumer protection across the EU throughharmonization of relevant EU laws. The directive has a substantial focus on advertising and salespromotion practices. Any such changes might have an adverse impact on the ability of credit andcharge card issuers, such as Barclaycard, to promote their products and services.     The possible unenforceability of, or possible liabilities for misrepresentation or breach ofcontract, in relation to an underlying credit or charge card agreement may result in unrecoverablelosses on accounts to which such agreements apply. If losses arise on these accounts, they will bewritten off and borne by the investor beneficiary and transferor beneficiary based on theirinterests in the receivables trust. Accordingly, if this were to occur, you could suffer a loss onyour Notes or an early redemption on your Notes.***Failure to Notify Cardholders of the Transfer of Receivables Could Delay or Reduce Payments on YourNotes***     The transfer by the transferor to the receivables trustee of the benefit of the receivables isgoverned by English law and does not give the receivables trustee full legal title to thereceivables. Notice to the cardholders of the transfer would perfect the legal title of thereceivables trustee to the receivables. The receivables trustee has agreed that notice of thetransfer will not be given to cardholders unless the transferor’s long-term senior unsecuredindebtedness as rated by Moody’s, Standard & Poor’s or Fitch were to fall below Baa2, BBB or BBB,respectively. The lack of notice has several legal consequences that could delay or reducepayments on your Notes.     Until notice is given to a cardholder, the cardholder will discharge his or her obligationunder the designated account by making payment to the transferor.     Prior to the insolvency of the transferor, unless notice was given to a cardholder who is adepositor or other creditor of the transferor, equitable set-offs may accrue in favour of thecardholder against his or her obligation to make payments to the transferor under the designatedaccount. These rights may result in the receivables trustee receiving reduced payments on thereceivables. The transfer of the benefit of any receivables to the receivables trustee willcontinue to be subject both to any prior equities that a cardholder had and to any equities thecardholder may become entitled to after the transfer. Where notice of the transfer is given to acardholder, however, some rights of set-off may not arise after the date notice is given.     Failure to give notice to the cardholder means that the receivables trustee would not takepriority over any interest of a later encumbrancer or transferee of the transferor’s rights who hasno notice of the transfer to the receivables trustee. This could lead to a loss on your Notes.     Failure to give notice to the cardholder also means that the transferor or the cardholder canamend the card agreement without obtaining the receivables trustee’s consent. This could adverselyaffect the receivables trustee’s interest in the receivables, which could lead to a loss on yourNotes.***Competition in the UK Credit Card Industry Could Lead to Early Redemption of Your Notes***     The credit and charge card industry in the United Kingdom is highly competitive. There isincreased competitive use of advertising, target marketing and pricing competition in interestrates and cardholder fees as both traditional and new card issuers seek to expand or enter the UKmarket and compete for customers.     New card issuers may rely on customer loyalty and may have particular ways of reaching andattracting customers. For example, major supermarket retailers are promoting the use of their owncards through extensive in-store campaigns and low introductory interest rates. Also, in the lastfew years a number of new card issuers have entered the UK market from the United States and havesought to build market share primarily through aggressive pricing. As a result of this competition,certain competitors offer cards to selected customers at lower interest rates than those offered byBarclaycard.     This competitive environment may affect the originator’s ability to originate new accounts andgenerate new receivables if the rate at which new receivables are generated declines significantlyand if the transferor is unable to nominate additional accounts or product lines for thereceivables trust, a pay out event could occur. A pay out event could result in an early redemptionof your Notes.***Social, Legal, Political and Economic Factors Affect Card Payments and Are Unpredictable***     Changes in card use, payment patterns, amounts of yield on the card portfolio generally andthe rate of defaults by cardholders may result from a variety of social, legal, political andeconomic factors in the United Kingdom. Social factors include changes in public confidence levels,attitudes toward incurring debt and perception of the use of credit and charge cards. Economicfactors include the rate of inflation, the unemployment rate and relative interest rates offeredfor various types of loans. Political factors include lobbying from interest groups, such asconsumers and retailers, and government initiatives in consumer and related affairs. There iscurrently significant political interest in the consumer credit market and, in particular, credit cards. The OFT in 2003 commenced an investigationinto the levels of default charges applied by several credit card lenders, including Barclaycard.With effect from 1 August 2006, Barclaycard introduced a default charge fee of £12, following theOFT’s public statement in April 2006 of what the OFT considered to be a reasonable amount for adefault charge.     We are unable to determine and have no basis on which to predict accurately whether, or towhat extent, social, legal, political or economic factors, including the above-noted OFTinvestigation and correspondence, will affect the future use of credit, default rates, the yield onthe card portfolio generally or cardholder repayment patterns. In addition, in September 2005 the OFTreceived a super-complaint from the Citizens Advice Bureau relating to payment protectioninsurance. As a result of its inquiries, the OFT commenced a market study on payment protectioninsurance in April 2006. We are unable to determine and have no basis on which to predictaccurately whether, or to what extent, the outcome of the study and any subsequent action by theOFT any potential OFT investigation in respect of payment protection insurance would affect theyield on the card portfolio generally or cardholder repayment patterns.
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***Reduction in the Rate of Interchange Caused by Potential Adverse Regulatory Rulings May AdverselyAffect Payments on Your Notes***     Barclaycard receives fees called “interchange” from the banks that clear transactions formerchants as partial compensation for amongst other things, taking credit risk and absorbing fraudlosses. The OFT has been conducting an examination of whether the rates of interchange paid byretailers in respect of MasterCard credit and charge cards in the United Kingdom are too high. Inconnection with this investigation, the OFT announced in September 2005 a decision with respect toan agreement (which had been terminated by mutual consent of the parties to that agreement inNovember 2004) regarding the rate of interchange for MasterCard credit and charge cards. The OFT’sdecision indicated that the agreement constituted an unlawful collective agreement on price withrespect to the level of interchange fees, and also stated that the agreement resulted in theunjustified recovery of certain costs. In June 2006, the Competition Appeals Tribunal, with theconsent of the OFT, set aside the OFT’s September 2005 decision. The OFT has subsequently launcheda new investigation into the agreement that has replaced the agreement terminated in November 2004and which is currently in effect with respect to rates of interchange to be paid in respect ofMasterCard credit cards and charge cards. If an OFT decision similar to that originally reachedregarding the old agreement is reached with respect to the current agreement, or if agreement isreached on a lower rate of interchange, such decision or agreement will adversely affect the yieldon UK credit card portfolios.     The OFT had previously also commenced an investigation into the rates of interchange inrespect of VISA cards and issued a statement of objections. This was withdrawn at the same time theoriginal OFT decision was set aside by the Competition Appeals tribunal in the MasterCard case. TheOFT has, as with MasterCard, commenced a further investigation into the rates of interchange onVISA cards. The European Commission issued a decision on 24 July 2002 concluding that an examination of thelevel of cross-border interchange within the European Union in respect of VISA credit and chargecards was too high and required VISA to undertake a phased reduction in the rate of interchange tobe paid by retailers in the future. We note that the European Commission will be free to re-examinethis issue after 31 December 2007. In addition, the European Commission is presently investigatingMasterCard’s rules and agreement, with a particular emphasis on the interchange fees. A reductionin the rate of interchange as a result of these findings could affect the future yield on the cardportfolio and adversely affect payment on your Notes.***Super-complaint to the OFT concerning credit card interest charges***     On 1 April 2007, the UK Consumer Interest Association known as Which? submitted asuper-complaint to the OFT pursuant to the Enterprise Act 2002. The super-complaint criticises thevarious ways in which credit card companies calculate interest charges on credit card accounts. On26 June 2007, the OFT announced a new program of work with the credit card industry and consumerbodies in order to make the costs of credit cards easier for consumers to understand. This OFTdecision follows the receipt by the OFT of the super-compliant from Which? This new work willexplore the issues surrounding the costs of credit for credit cards including purchases, cashadvances, introductory offers and payment allocation. The OFT’s programme of work is expected totake six months.***OFT Market Study***     The OFT announced a market study into personal current accounts (“**PCAs**”) in UK on 26th April2007. The market study will look at: (i) whether the provision of “free if in credit” PCAsdelivers sufficiently high levels of transparency and value for customers; (ii) the implicationsfor competition and consumers if there were to be a shift away from “free if in credit” PCAs; (iii)the fairness and impact on consumers generally of the incidence, level and consequences of accountcharges; and (iv) what steps could be taken to improve customers’ ability to secure better valuefor money, in particular to help customers make more informed current account choices and drivecompetition.     The study will focus on PCAs but will include an examination of other retail banking products,in particular savings accounts, credit cards, personal loans and mortgages in order to take intoaccount the competitive dynamics of UK retail banking.***Electronic Commerce Directive***     With effect from (for the most part) August 21, 2002, the Ecommerce Directive (the “ECD”) hasbeen effected in the United Kingdom by a number of statutory instruments and implementing rulesincluding, but not limited to, the Electronic Commerce (EC Directive) Regulations 2002 (which applyto non-FSA regulated entities), the Electronic Commerce Directive (Financial Services and Markets)Regulations 2002, as amended (which apply to FSA regulated entities) and the creation of theElectronic Commerce Directive sourcebook (“ECO”) in the FSA Handbook.     In essence the ECD aims to free up cross-border “information society services” by requiringMember States to apply the principle of “country of origin” regulation to services provided usingelectronic means. “Information society services” are defined as “any service normally provided forremuneration, at a distance by means of electronic equipment for the processing (including digitalcompression) and storage of data, and at the individual request of a recipient of a service” andwill therefore include (but are not limited to) web-based online information. Under the principleof “country of origin”, a firm providing cross-border “information society services” must complywith the applicable rules in the country from which it is providing the services and the countryinto which it is providing the services cannot impose additional restrictions. As such, inproviding “information society services” (whether in the UK or in another EEA state), the Sellerwill be required to comply with applicable rules in the United Kingdom (including, but not limitedto, the United Kingdom financial promotions regime).     The ECD also requires Member States to impose disclosure and other rules on firms offering“information society services” before any contract is entered into. The information to be disclosedincludes, but is not limited to, contact details and background information in respect of theservice provider, a variety of information that is required to be provided in a clear andunambiguous manner and disclosure of information to the recipient on how to conclude contractualarrangements.     Failure to comply with the ECO rules could result in, amongst other things, disciplinaryaction by the FSA and possible claims under section 150 of FSMA for breach of FSA rules. Under theElectronic Commerce (EC Directive) Regulations 2002 the information disclosure requirements areenforceable, at the suit of any recipient of a service, by an action against the service providerfor damages for breach of statutory duty. In addition, where a person has entered into a contractto which the Electronic Commerce (EC Directive) Regulations 2002
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apply and the service provider has not made available means of allowing him to identify and correctinput errors prior to concluding the contract, the recipient will be entitled to rescind thecontract unless a court having jurisdiction in respect of the particular contract orders otherwiseon the application of the service provider. The Electronic Commerce (EC Directive) Regulations 2002also enable an application to be made for a court order to stop an infringement of the informationdisclosure requirements that harms the collective interests of consumers.***A Change in the Terms of the Receivables May Adversely Affect the Amount or Timing of Collectionsand May Cause an Early Redemption of Your Notes or a Downgrade of Your Notes***     Only the receivables arising under the designated accounts are transferred to the receivablestrustee. The originator will continue to own those accounts. As the owner of the accounts, theoriginator retains the right to change the terms of the accounts. For example, the originator couldchange the monthly interest rate, increase or reduce the credit limits on the accounts, reduce oreliminate fees on the accounts or reduce the required minimum monthly payment.     The originator may change the terms of the accounts to maintain its competitive position inthe UK credit and charge card industry. Changes in interest and fees could lower the amount offinance charge receivables generated by those accounts. This could cause a pay out event to occur,which might cause an early redemption of your Notes. This could also cause a reduction in thecredit ratings on your Notes.***Principal on Your Notes May Be Paid Earlier Than Expected – Creating a Reinvestment Risk to You –or Later than Expected***     The receivables in the receivables trust may be paid at any time and we cannot assure you thatnew receivables will be generated or will be generated at levels needed to maintain the receivablestrust. To prevent the early redemption of the notes, new receivables must be generated and added tothe receivables trust or new accounts must be nominated for the receivables trust. The receivablestrust is required to maintain a minimum amount of receivables. The generation of new receivables orreceivables in new accounts is affected by the originator’s ability to compete in the currentindustry environment and by customers changing borrowing and payment patterns. If there is adecline in the generation of new receivables or new accounts, you may be repaid your principalbefore the expected date.     One factor that affects the level of finance charge and principal collections is the extent ofconvenience usage. Convenience use means that the cardholders pay their account balances in full onor prior to the due date. The cardholder, therefore, avoids all finance charges on his or heraccount. An increase in the convenience usage by cardholders would decrease the effective yield onthe accounts and could cause a pay out event and therefore possibly an early redemption of yourNotes.     No premium will be paid upon an early redemption of your Notes. If you receive principal onyour Notes earlier than expected, you may not be able to reinvest the principal at a similar rateof return.     Alternatively, a decrease in convenience usage may reduce the principal payment rate on theaccounts. This could result in you receiving the principal on your Notes later than expected.***Credit Enhancement May Be Insufficient to Prevent a Loss on Your Notes***     Credit enhancement for your Notes is limited. The only assets that will be available to makepayment on your Notes are the assets of the Company pledged to secure payment of your Notes. Ifproblems develop with the receivables, such as an increase in losses on the receivables, or ifthere are problems in the collection and transfer of the receivables to the trust, or if the swapcounterparty fails to make payments on the swap agreement, it is possible that you may not receivethe full amount of interest and principal that you would otherwise receive.***Issuance of Additional Series by the Receivables Trustee on Behalf of the Receivables Trust MayAdversely Affect Payments on Your Notes***     There have been twelve series (of which only six are outstanding) created within thereceivables trust. Additional series may from time to time be created within the receivables trust.Any new series of investor certificates – and medium term notes or certificates and notes – willalso be payable from the receivables in the receivables trust. The principal terms of any newseries of investor certificates will be contained in a new series supplement to the declaration oftrust and trust cash management agreement. The terms of a new series contained in the newsupplement to the declaration of trust and trust cash management will not be subject to your priorreview or consent.     The principal terms of a new series may include methods for determining investor percentagesand allocating collections, provisions creating different or additional security or other creditenhancement for the new series, provisions subordinating the new series to other series, and otheramendments or supplements to the declaration of trust and trust cash management agreement thatapply only to the new series. It is a condition to the issuance of a new series that each ratingagency that has rated any debt ultimately payable from a prior series of investor certificates thatis outstanding – including your Notes – confirms in writing that the issuance of the new serieswill not result in a reduction or withdrawal of its rating.     However, the terms of a new series could adversely affect the timing and amounts of paymentson any other outstanding series, including series of which your Notes are a part.***Credit Quality of the Receivables Trust’s Assets May Be Eroded by the Addition of New AccountsWhich Could Adversely Affect Collections of Receivables***     The transferor may designate additional credit or charge card accounts as designated accountsand offer the receivables trustee an assignment of the receivables arising under the additionalaccounts. The transferor may be required at times to nominate additional accounts as designatedaccounts. These accounts may include accounts that were originated or acquired using criteria thatare different from those applicable to the accounts from which receivables were originally assignedto the receivables trustee. For example, they could be originated at a different date withdifferent underwriting standards, or they could be acquired from another institution that useddifferent underwriting standards. Consequently, there can be no assurance that accounts that becomedesignated accounts in the future will have the same credit quality as the designated accounts onthe closing date. This could adversely affect collections on the receivables. If this occurred youcould suffer a loss on your Notes.
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***Interest Rate Payable on the Medium Term Note Certificates May Increase Without a CorrespondingChange in Card Rates Potentially Causing a Loss on Your Notes or Early Redemption of Your Notes***     In line with the rest of the UK market, Barclaycard may apply differential interest rates toeach product offering, some of which may be fixed for predetermined periods. The majority of thedesignated accounts have monthly interest rates that are constant, except for Barclaycard’s abilityto change the interest rate at its discretion. The interest rate paid on the medium term notecertificates will be based on the London interbank offered rate for deposits in sterling, whichchanges from time to time. Accordingly, the interest payable on the medium term note certificatescould increase without a corresponding increase in the amount of finance charge collections. Ifthis occurred, you could suffer a loss on your Notes or a pay out event could occur causing anearly redemption of your Notes.***Commingling of Collections with Transferor May Delay or Reduce Payments on Your Notes***     Collections from cardholders for the designated accounts and other Barclaycard cardholderswill initially be paid to an operating account of the transferor. The transferor has declared atrust over the operating account in favour of the receivables trustee for collections that aredeposited in it. Collections on the designated accounts will be transferred to the trusteecollection account within two business days of being identified.     For the limited time that collections on the designated accounts are in the operating account,they may be commingled with other funds of the transferor or future beneficiaries and they may beuntraceable. Consequently, if the transferor were to become insolvent, there may be a delay in thetransfer of collections to the receivables trustee if the transferor – or a liquidator oradministrator of the transferor – attempted to freeze the operation of the operating accountpending completion of any rights of tracing. This could ultimately cause a delay or reduction inthe payments you receive on your Notes.***If the Transferor Opts to Treat a Portion of Principal Receivables as Finance Charge Receivables,an Early Redemption of Your Notes Could Occur or Could Be Delayed***     The transferor may opt to cause a percentage of receivables that would otherwise be treated asprincipal receivables to be treated as finance charge receivables. If the transferor were toexercise this option, it could prevent a pay out event from occurring because of a reduction of theportfolio yield, which could delay an early redemption of your Notes at a time when the performanceof the receivables is deteriorating. Once this option is exercised, the transferor may also reducethe percentage or stop using the percentage at any time. However, this option, if exercised, willreduce the aggregate amount of principal receivables, which may increase the likelihood that thetransferor will be required to designate additional accounts from which receivables will beassigned to the receivables trustee. If the transferor were unable to designate additionalaccounts, a pay out event could occur and you could receive payments of principal on your Notesbefore you expect them.***If Optional Early Redemption Occurs, It Will Result in an Early Redemption of Your Notes Creating aReinvestment Risk***     When the total principal balance of the notes is reduced to less than 10 per cent. of theiroriginal principal balance, the Company has the option to redeem the notes in full. This earlyredemption may result in an early return of your investment. No premium will be paid in the eventof an exercise of the early redemption option. If you receive principal on your Notes earlier thanexpected, you may not be able to reinvest the principal at a rate of return similar to that on yourNotes.***If Cardholders Are Concentrated in a Geographic Region, Economic Downturn in that Region MayAdversely Affect Collections of Receivables***     If the receivables trust has a high concentration of receivables from cardholders located in asingle region, an economic downturn in that region may have a magnified adverse effect on thereceivables trust because of that concentration.     As determined from postcode information for the location of cardholders as of 31 December2006, the three largest concentrations of cardholders as at 31 December 2006 were Londonrepresenting 19.3 per cent. of total outstanding balances, the South East of England with 16.9 percent. of total outstanding balances and the East of England with 11.7 per cent. of totaloutstanding balances. No other region currently accounts for more than 8.9 per cent. of theoutstanding balance of the receivables. These concentration levelsmay change in the future. Future adverse economic conditions affecting any of these regions or any of the other regions,however, could adversely affect the performance of the receivables which could result in a loss onyour Notes.***Adoption of the Euro by the United Kingdom Would Have Uncertain Effects on Your Notes***     Before your Notes have matured, the euro could become the lawful currency of the UnitedKingdom. If that were to happen, all amounts payable on the medium term note certificates –including the sterling payments owed to the swap counterparty on the swap agreements but not anydollar payments made by the swap counterparty to the Company – may become payable in euro. If themedium term note certificates are outstanding when the euro becomes the lawful currency of theUnited Kingdom, we intend to make payments on the medium term note certificates and the swapagreements according to the then market practice of payment on debts or, as the case may be, swaps.We are uncertain what effect, if any, the adoption of the euro by the United Kingdom may have onyour Notes.
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***Taxable Nature of the MTN Issuer or the Company Could Cause a Loss on Your Notes***     The MTN Issuer and the Company will be liable to UK corporation tax at the maximum rate ofcurrently 30 per cent (proposed to be reduced to 28% with effect from April 2008). So long as theMTN Issuer and the Company respectively are within the application of the Taxation ofSecuritisation Companies Regulations 2006 (the “**Regulations**”), their taxable profits will in eachcase be limited to amounts not exceeding 2 basis point per annum of the principal outstanding onthe medium term notes and the notes respectively.     In order to fall within the application of the Regulations, a company must fulfil certainconditions, including ones which relate to its ongoing asset holdings (that the assets should be“financial assets” according to applicable accounting practice) and its ongoing cash flowmanagement. These conditions are designed to ensure that the Regulations will apply to a companywhich is genuinely established and operated as a securitisation vehicle in a securitisation ofmoney debts. So long as the cash flows of the MTN Issuer and the Company continue to be managed inthe same way as they have been to date, they can be expected as a factual matter to meet therelevant conditions.     The Regulations have only been in force since the beginning of 2007 and the practices of theUK tax authorities in implementing the Regulations are still evolving. However, the UK taxauthorities have worked very closely with the securitisation industry on developing the Regulationsand related practices, and the Regulations are designed to allow genuine securitisation vehiclecompanies to be taxed on a basis which is compatible with market and rating requirements.     If the MTN Issuer or the Company failed to satisfy any of the applicable conditions, and sodid not fall within the application of the Regulations, the taxable profits of the company inquestion would be computed on the basis of its statutory accounts (subject to certain adjustmentsunder the UK tax legislation). This could potentially lead to the affected company having taxableprofits which were different from its net cash position, giving rise to unfunded tax liabilitiesfor that company, and you could suffer losses on your notes as a result.     The above remarks concerning the UK taxation treatment of the MTN Issuer and the Company arebased on English law, regulatory, accounting and administrative practice in effect as at the dateof this prospectus, and having due regard to the expected tax treatment of the issuer and the MTNIssuer under United Kingdom tax law and the published practice of HMRC in force or applied in theUnited Kingdom as at the date of this prospectus. No assurance can be given as to the impact of anypossible change to English law, regulatory, accounting or administrative practice in the UnitedKingdom or to United Kingdom tax law, or the interpretation or administration thereof, or to thepublished practice of HMRC, as applied in the United Kingdom after the date of this prospectus.***Change in the Taxable Nature or Basis of Taxation of the Receivables Trustee, MTN Issuer or CompanyCould Cause a Loss on Your Notes***     If there is a relevant change of law in the United Kingdom or Jersey, or change of practice ofthe United Kingdom HM Revenue and Customs, this could result in the taxable profits of the MTNIssuer or the Company being greater than expected and you could suffer losses on your Notes as aresult.     An opinion of UK tax advisers, however, is not binding on the United Kingdom HM Revenue andCustoms or the courts, and no specific transaction rulings on this issue will be obtained from theUnited Kingdom HM Revenue and Customs. In addition, there is no case law authority on a number offeatures of the transactions that raise difficult questions.***Limited Nature of Credit Ratings Assigned to Your Notes***     Each credit rating assigned to your Notes reflects the rating agency’s assessment only of thelikelihood that interest and principal will be paid to you by the final redemption date, not thatit will be paid when expected or scheduled. These ratings are based on the rating agencies’determination of the value of the receivables, the reliability of the payments on the receivables,the creditworthiness of the swap counterparty and the availability of credit enhancement.The ratings do not address the following:**•** the likelihood that the principal or interest on your Notes will be redeemed or paid, as expected, on thescheduled redemption dates;**•** the possibility of the imposition of United Kingdom or European withholding tax;**•** the marketability of the notes, or any market price; or**•** that an investment in the notes is a suitable investment for you.A rating is not a recommendation to purchase, hold or sell notes.***Ratings Can Be Lowered or Withdrawn After You Purchase Your Notes***     Any rating agency may lower its rating or withdraw its rating if, in the sole judgement of therating agency, the credit quality of the notes has declined or is in question or for other tangibleand intangible reasons. If any rating assigned to your Notes is lowered or withdrawn, the marketvalue of your Notes may be reduced.     Pursuant to the swap agreements the swap counterparty may assign the swap agreements to areplacement swap counterparty if the long-term credit rating of the swap counterparty is withdrawnor reduced below “A1” by Moody’s or its short-term credit rating is withdrawn or reduced below“P-1” by Moody’s or its short-term credit rating is reduced below “A-1+” by Standard & Poor’s andthe swap counterparty has not remedied the event or conducted such other actions (such ascollateralisation or the obtaining of a guarantor) set out under the terms of the swap agreements.We cannot assure you, however, that the swap counterparty will be able to find a replacementcounterparty and assign the swap agreements in this event or that the ratings of your Notes willnot be withdrawn or reduced in this event.
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***Termination of the Swap Agreements Could Result in an Early Redemption of Your Notes***     A swap agreement may be terminated, but only if the Company has been directed to do so by therelevant noteholders, if as a result of a change in applicable law, withholding taxes would beimposed – by any jurisdiction – on payments to the Company under the medium term note certificatesor on any payments made or required to be made to the Company by the swap counterparty or by theCompany to the swap counterparty under the swap agreement and there are not any reasonable measuresthat the swap counterparty or the Company can take to avoid their imposition. In addition, a swapagreement may be terminated, but only if the Company has been directed to do so by the relevantnoteholders, if as a result of a change in applicable law, the Company or any paying agent has orwill become obligated to deduct or withhold amounts from payments on the related class of notes tobe made to any of the related noteholders on the next interest payment date, for any tax,assessment or other governmental charge imposed by the United Kingdom or any political subdivisionor taxing authority of the United Kingdom on the payments and there are no reasonable measures theCompany can take to avoid the tax or assessment.     A payment default by the swap counterparty or a default in the payment in respect of interestby the Company to the swap counterparty, if funds are available to the Company to make thatpayment, will result in a termination of a swap agreement. The swap agreements may also terminatefollowing a material breach of a representation or covenant by the swap counterparty, theinsolvency of the Company or the swap counterparty or changes in law resulting in illegality.     The swap agreement may also be terminated if certain other events occur.     The termination without replacement of any of the swap agreements will result in an event ofdefault under the notes and a pay out event that results in a rapid amortisation period. We cannotassure you that any of the swap agreements will not terminate prior to the payment in full of theprincipal balance of your Notes. If any of the swap agreements terminates prior to the payment infull of the principal balance of your Notes, you could receive payments of principal on your Notesbefore you expect them.***Change in Law May Result in Withholding Taxes on Swap Payments or the Medium Term Note Certificatesand this May Reduce the Amount You Are Paid on Your Notes***     The Company and the swap counterparty will each represent and warrant in each swap agreementthat, under current applicable law, each of them is entitled to make all payments required to bemade by them under the swap agreement free and clear of, and without deduction for or on accountof, any taxes, assessments or other governmental charges – which we refer to as withholding taxes.However, neither the Company nor the swap counterparty will be required to indemnify the otherparty for any withholding taxes imposed on payments under a swap agreement as a result of a changein applicable law.     If any withholding taxes would be imposed – by any jurisdiction – on payments to the Companyunder the medium term note certificates as a result of a change in applicable law, then the MTNIssuer additional interest payments, to the extent available, will be converted at the spotexchange rate in U.S. dollars to cover the shortfall in the amounts available for payment to thenoteholders caused by the amount withheld. If the MTN Issuer additional interest payments are notsufficient to cover the shortfall, then payments to first the class C noteholders, second the classB noteholders and finally the class A noteholders will be reduced by the amount withheld that isnot covered by the MTN Issuer additional interest payments.     If any withholding tax would be imposed – by any jurisdiction – on any payments made orrequired to be made by the swap counterparty to the Company or by the Company to the swapcounterparty under a swap agreement as a result of a change in applicable law and the obligation todeduct or withhold cannot be avoided by the swap counterparty or the Company, then the amount to bepaid by the other party will be reduced also pro rata by any amount withheld for any withholdingtaxes. In that event the MTN Issuer additional interest payments, to the extent available, will beconverted at the spot exchange rate in U.S. dollars to cover the shortfall in the amounts availablefor payment to the noteholders caused by the amount withheld. If the MTN Issuer additional interestpayments are not sufficient to cover the shortfall, then payments to first the class C noteholders,second the class B noteholders and finally the class A noteholders will be reduced by the amountwithheld that is not covered by the MTN Issuer additional interest payments.     Alternatively, the Company may terminate the swap agreement but only if it has been directedto do so by the relevant noteholders.***Change in Law May Result in Withholding Taxes on Your Notes and This May Reduce the Amount You ArePaid on Your Notes***     If any UK withholding taxes are imposed on any payments made or required to be made by theCompany or any paying agent on any class of notes, then payments to that class of noteholders willbe reduced pro rata by any amount withheld for any withholding taxes, and in addition, if therelevant noteholders so elect to direct the Company, the Company will terminate the swap.***Payment of an Early Termination Payment to the Swap Counterparty May Reduce Payments on Your Notes***     If a swap agreement is terminated before its scheduled termination date, the Company or theswap counterparty may be liable to make an early termination payment to the other party. The amountof any early termination payment will be based on the market value of the terminated swapagreement. This market value will be computed on the basis of market quotations of the cost ofentering into a swap transaction with the same terms and conditions that would have the effect ofpreserving the respective full payment obligations of the parties. Any early termination paymentcould, if the sterling/dollar exchange rate has changed significantly, be substantial.     Any early termination payment made by the Company to the swap counterparty under a swapagreement will be made first from MTN Issuer additional interest payments and second fromrepayments of principal on the medium term note certificates equal to the amount of principalrepayments received by the Company on medium term note certificates. That could cause the sterlingamounts available for conversion to dollars, and possibly your payments, to be reduced – perhapssubstantially. If the amount of available MTN Issuer additional interest payments and repayments ofprincipal on the medium term note certificates is insufficient to pay the early termination paymentunder the relevant swap agreement, the balance of the early termination payment will be paid to theextent that such amounts are available on the next interest payment date together with interest.
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***You Will Not Receive Physical Notes, Which May Cause Delays in Distributions and Hamper YourAbility to Pledge or Resell the Notes***     Unless the global note certificates are exchanged for individual note certificates, which willonly occur under a limited set of circumstances, your beneficial ownership of the notes will onlybe registered in book-entry form with DTC, Euroclear or Clearstream, Luxembourg. The lack ofphysical notes could, among other things:**•** result in payment delays on the notes because we will be sending distributions on the notes to DTC, Euroclear orClearstream, Luxembourg instead of directly to you;**•** make it difficult for you to pledge or otherwise grant security over the notes if physical notes are required by the partydemanding the pledge or other security; and**•** hinder your ability to resell the notes because some investors may be unwilling to buy notes that are not in physical form.**Item 4. Information on the Company****Gracechurch Card Funding (No. 2) PLC*****General***     The Company was formed in England and Wales on July 29, 2002 under the name of Sunnytrail PLCwith registered number 4497894 as a public company with limited liability under the Companies Acts1985 and 1989, which is also the primary legislation under which the Company operates. It passed aspecial resolution to change its name to Gracechurch Card Funding (No. 2) PLC on September 18,2002.***Property, Plant and Equipment***     Aside from the Series 02-1 MTN Certificate, the Company does not own, lease, or otherwiseoccupy any property.***Legal Proceedings***     There are none, nor since the Company’s incorporation have there been any, legal orarbitration proceedings, including any proceedings that are pending or threatened of which any ofthe Company is are aware, which may have, or have had in the recent past, a significant effect onits financial position.**The Medium Term Note Issuer*****General***     The MTN Issuer is Barclaycard Funding PLC. It was formed in England and Wales on August 13,1990 as Barshelfco (No. 28) Limited, with registered number 2530163, as a company with limitedliability under the Companies Acts 1985 and 1989, which is primary legislation under which the MTNIssuer operates. It reregistered as a public company and changed its name to Barclaycard FundingPLC on October 19, 1999.     The MTN Issuer was formed principally to issue medium term notes or certificates from time totime in series; enter into financial arrangements to issue the medium term notes or certificates;purchase series of investor certificates from time to time representing a beneficial interest inthe receivables trust and enter into documents and exercise its powers connected to the foregoing.The MTN Issuer has not engaged in any activities since its incorporation other than the above.     The MTN Issuer has a fiscal year end of December 31.***Property, Plant and Equipment***     The property of the MTN Issuer consists of Investor Certificates representing beneficialinterests in Series 02-1, Series 03-1, Series 04-2, Series 05-1, Series 05-2, Series 05-3, Series05-4 and Series 06-1 of the receivables trust. Aside from the Investor Certificates, we do not own,lease, or otherwise occupy any property.***Legal Proceedings***     There are none, nor since the MTN Issuer’s incorporation have there been any, legal orarbitration proceedings, including any proceedings that are pending or threatened of which any ofthe MTN Issuer is aware, which may have, or have had in the recent past, a significant effect onthe MTN Issuer’s financial position.
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**The Receivables Trustee and the Receivables Trust*****General***     The Receivables Trustee is a private limited liability company incorporated under the laws ofJersey, Channel Islands on September 29, 1999. The shares of the Receivables Trustee are held bynominee companies on behalf of a professional trustee company — not affiliated with Barclays BankPLC — as trustee on trust for charitable purposes. This means that any profits received by theReceivables Trustee, after all amounts have been paid on the investor certificates and in meetingthe costs and expenses of the receivables trustee, will be available to be divided to the trusteefor distribution for charitable purposes or to charities exclusively for charitable purposesselected at the discretion of the receivables trustee. The Receivables Trustee acts as trustee ofthe receivables trust.     The receivables trust is a trust formed under English law the terms and conditions of whichare contained in a deed of amendment and restatement relating to a declaration of trust and trustcash management agreement dated November 23, 1999 as supplemented by the following: **•** Series 02-1 Supplement to declaration of trust and trust management agreement dated October 29, 2002.  **•** Series 03-1 Supplement to declaration of trust and trust management agreement dated April 8, 2003.  **•** Series 04-2 Supplement to declaration of trust and trust management agreement dated November 23, 2004.  **•** Series 05-1 Supplement to declaration of trust and trust management agreement dated June 22, 2005.  **•** Series 05-2 Supplement to declaration of trust and trust management agreement dated September 13, 2005.  **•** Series 05-3 Supplement to declaration of trust and trust management agreement dated October 18, 2005.  **•** Series 05-4 Supplement to declaration of trust and trust management agreement dated November 23, 2005.  **•** Series 06-1 Supplement to declaration of trust and trust management agreement dated September 28, 2006.***Property, Plant and Equipment***     The Receivables Trustee does not own, lease, or otherwise occupy any property aside fromreceivables in designated revolving credit and charge card accounts of Barclaycard, a division ofBarclays Bank PLC, and related rights.***Legal Proceedings***     There are no, nor since the Receivables Trustee’s incorporation on September 29, 1999 havethere been any, legal or arbitration proceedings, including any proceedings that are pending orthreatened of which the Receivables Trustee is aware, which may have, or have had in the recentpast, covering at least the previous 12 months, a significant effect on the Receivables Trustee’sfinancial position.     Officer’s Certificates of Compliance, executed by a director of each of the Company, the MTNIssuer and the Receivables Trustee are filed herewith as Exhibits 13.1, 13.2 and 13.3. TheOfficer’s Certificate of Compliance of the Company contains a statement that the Company hascomplied with all conditions and covenants under the Relevant Documents for the issuance of theNotes by the Company. The Officer’s Certificate of Compliance of the MTN Issuer and the ReceivablesTrustee contains a statement that the MTN Issuer and the Receivables Trustee, respectively havecomplied with all conditions and covenants under the Relevant Documents for the issuance of the MTNCertificates and the investor certificates by the MTN Issuer the receivables trust respectively.***Organisation Structure***     The following is a brief summary description of the Barclaycard securitisation program.     Barclaycard, a division of Barclays Bank PLC,(“Barclays”), has previously assigned all of itspresent and future beneficial interest in receivables in designated revolving credit and chargecard accounts owned by Barclaycard and opened in the United Kingdom. Only the receivables wereassigned. The accounts were retained by Barclaycard.     The receivables were assigned to Gracechurch Receivables Trustee Limited, a special purposecompany incorporated in Jersey, Channel Islands, acting as receivables trustee. The receivablestrustee holds the receivables on trust for Barclaycard, as transferor beneficiary and excessinterest beneficiary, and a special purpose subsidiary of Barclays called Barclaycard Funding PLC,the “MTN Issuer”, as investor beneficiary. Barclaycard separately transferred its entitlement toreceive excess interest attributable to the MTN Issuer.     The receivables trustee may issue multiple series of investor certificates to the MTN Issuer.Each series of investor certificates represents an undivided beneficial interest in the receivablestrust. They entitle the MTN Issuer to payments of interest and principal payable from collectionson the receivables.     The MTN Issuer financed its acquisition of an undivided beneficial interest in the receivablestrust, evidenced by the issuance of each series of investor certificates, by issuing series oflimited recourse medium term notes or certificates to the Company and credit enhancement providers.The limited recourse nature of the medium term notes or certificates ensure that the MTN Issuer isonly ever liable under a series of medium term notes or certificates for payments of principal andinterest equal to what is paid under the corresponding series of investor certificates.     The Company and the MTN Issuer, in turn, financed their purchases of each series of mediumterm notes or certificates by issuing the Notes.
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**Item 5. Operating and Financial Review and Prospects****Operating Results**     Omitted pursuant to SEC no-action letter guidance.**Recent Accounting Developments**     Omitted pursuant to SEC no-action letter guidance.**Liquidity and Capital Resources**     Omitted pursuant to SEC no-action letter guidance.**Research and Development, Patents and Licenses**     None.**Trend Information**     Omitted pursuant to SEC no-action letter guidance.**Off-Balance Sheet Arrangements**     Not Applicable.**Tabular Disclosure of Contractual Obligations**     Not Applicable.**Safe Harbor**     Not Applicable.**Item 6. Directors, Senior Management and Employees****Directors and Senior Management*****The Company***     The following sets out the directors of the Company and their business address. Because theCompany are organized as special purpose companies and will be largely passive, it is expected thatthe directors of the Company in that capacity will participate in their management to a limitedextent.     **Name** **Nationality** **Business Address**Jonathon William Albright USA 1234 Pavilion Drive, Northampton NN4 7SGSFM Directors Limited   35 Great St Helens, London EC3A 6APSFM Directors (No. 2) Limited   35 Great St Helens, London EC3A 6APJohn Stephen Llewellyn-Jones******