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members. Since in USR 2001, reg. 24 and also in USR 2001, reg. 20 both registers are referred to as ‘register of members’, USR 2001 reg. 24 applies to both the issuer and the Operator register of members. Both the issuer and the CREST register of members constitute prima facie evidence of title to the shares and of other information contained in them by virtue of USR 2001.

USR 2001 has transformed the CREST records into the shareholder register. This upgrade is, however, subject to one important qualification. CREST is required only to maintain the register of uncertificated shares. Any records CREST may keep of certificated shares do not constitute prima facie evidence. The upgrade effected by USR 2001 privileges only CREST records of uncertificated securities.

USR 2001 has also downgraded the legal status of the register maintained by the company. The particulars entered on the issuer register of members are not considered prima facie evidence if they are inconsistent with the Operator register of members.39 Since CREST is required by the USR 2001 to keep records only of uncertificated shares, this downgrade does not apply to certificated shares. As a result, a record on the issuer’s register of members remains prima facie evidence of certificated shares, but has lost this quality in so far as the records of uncertificated shares are inconsistent with the CREST register. USR 2001 has reduced the evidential quality of the issuer records in that respect.

3.4.2.2 Effect of entries on registers: public sector securities, corporate securities other than shares

For public sector securities there now exists a CREST ‘register of public sector securities’ and ‘records of uncertificated public sector securities’ maintained by the Bank of England, the issuing local authority, or its registrar.40 The latter records, however, do not enjoy special evidential status: only the CREST register constitutes prima facie evidence of any

matters which are by USR 2001 directed or authorised to be inserted in it.41

For corporate securities other than shares, the issuer is no longer required to maintain a register of securities held in uncertificated form, but shall instead keep a record of entries made on the Operator register.42 The issuer record of uncertificated securities does not

39 USR 2001, reg. 24 (2). 40 USR 2001, reg. 21 (1–3). 41 USR 2001, reg. 24 (5). 42 USR 2001, reg. 22 (2) b.

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constitute prima facie evidence. Instead, the Operator keeps the register of uncertificated corporate securities. The Operator register provides for evidence in the same way as a register maintained by the issuer would provide for evidence.43 USR 2001 did not interfere with any duty the issuer of corporate securities may be under to keep a register of certificated corporate securities; insofar as an issuer is under such a duty, this duty continues to exist.

3.4.2.3 Conclusions

USR 2001 upgraded the CREST records of uncertificated shares, of uncertificated public sector securities and of uncertificated corporate securities other than shares, to prima facie evidence. At the same time it downgraded the records maintained by the issuers in relation to uncertificated shares and, to an even greater extent, in relation to uncertificated corporate securities other than shares. USR 2001 has not interfered with the rules governing registers of certificated securities.

This revised transfer regime shows strong evidence of the original common law transfer procedures. The 2001 reforms serve as an example of how existing legal doctrine determines the content of the rules that will be implemented when a project of law reform is carried out: even when the aim of the law reform project is to cause a legal system to converge with what is perceived to be an international standard, national legal doctrine determines the content of the new legal rules.

This English law reform project also illustrates the nature of the influence exercised by incumbent market infrastructure providers. Keeping in line with existing legal doctrine, England decided to adopt a new rule whereby the CREST records would constitute the register of holders of securities. The proposal, however, did not carry this reform to its logical conclusion: it did not abolish the need for registers or records kept by or on behalf of issuers. USR 2001 preserves the decentralised registers for all certificated securities and also for uncertificated shares. Moreover, there continue to exist decentralised records of uncertificated securities other than shares. The reform proposal did not go so far as to abolish the need for issuer registers or records altogether.

In relation to shares, USR 2001 goes to pains to continue the decentralised shareholder register. To achieve this, the law is carefully drafted to accommodate a split register and to address issues arising out of

43 USR 2001, reg. 24 (6).