(1) Subject to paragraph (2), where the operator permits a security other than a share to be a participating security, title to units of that security which are recorded in a register of securities as being held in uncertificated form shall be transferred by means of a relevant system.

(2) If, in relation to any security (other than a share), the law under which it was constituted, or a current term of its issue, is consistent with -

(a) the holding of title to units of that security in uncertificated form,

(b) the transfer of title to units of that security by means of a relevant system, or

(c) these regulations,

the issuer shall not permit the holding of units of that security in uncertificated form, or the transfer of title to units of that security, by means of a relevant system.

(3) In this regulation the terms of issue of a security shall be taken to include the terms prescribed by the issuer on which units of the security are held and title to them is transferred.