Scheme Rules IV

10. Demand and Payment

10.1 A demand by a Beneficiary for payment under the Guarantee must be in writing and made in the form of Annex 9 and delivered to the addressees therein specified.

10.2 A demand by a Beneficiary for payment under the Guarantee which is not made in the form of Annex 9 shall be void.

10.3 The Guarantor shall make payment, in respect of a valid demand by a Beneficiary under the Guarantee, to the principal paying agent or, as the case may be, the registrar in respect of the Guaranteed Liability specified in the Application relative to that Guaranteed Liability.

10.4 Any such payment to the principal paying agent or registrar under Rule 10.3 will, notwithstanding any contrary provision in any document under or by reference to which the Guaranteed Liability is issued, created or constituted, for the purposes of the Guarantee be deemed to be payment to the Beneficiary, and such payment shall constitute a complete discharge of the Guarantor in respect its liability under the Guarantee in respect of the relevant demand of that Beneficiary.

11. Reporting and Consultation

11.1 Each Eligible Institution must, within six months of its Recognition Date, submit to the Guarantor a plan for maintaining or restoring the capacity of the Eligible Institution to borrow in the wholesale financial markets without the benefit of the Guarantee.

11.2 The plan referred to in Rule 11.1 shall describe measures that shall be taken by the Eligible Institution to cease activities that would be structurally loss-making even after the termination of the Guarantee

11.3 Each Eligible Institution must consult on a regular basis with the Guarantor in relation to the proposals, of each member of the corporate group of which the Eligible Institution is a member, to issue debt securities.

11.4 The Eligible Institution must consult on a timely basis with the DMO with respect to the date of the launch and issue of any Guaranteed Liability of the Eligible Institution.

11.5 The Eligible Institution must, in respect of each Guaranteed Liability issued, within three Business Days of such issue, notify the DMO in writing of the following details in respect of the Guaranteed Liability:

  • the ISIN
  • the principal amount
  • the scheduled maturity date
  • the date of issue
  • in the case of a fixed rate Guaranteed Liability, the interest rate
  • in the case of a floating rate Guaranteed Liability, the margin and the source of the
  • reference rate
  • in the case of a zero coupon Guaranteed Liability, the actual gross proceeds of
  • issuance
  • the interest payment dates (if any).

12. Notices

12.1 Any notice or other communication under or in connection with these Rules or the Guarantee (other than an Application made under Rule 4.1 or Rule 4.5, or a demand made under Rule 10.1) shall be by delivery by hand or (in the case only of the DMO or an Eligible Institution) by facsimile:

12.1.1 in the case of the Guarantor, to: The Commissioners of Her Majesty’s Treasury, 1 Horse Guards Road London SW1A 2HQ marked for the attention of Team Leader, Debt and Reserves Management Team

12.1.2 in the case of the DMO, to: The United Kingdom Debt Management Office Eastcheap Court 11 Philpot Lane London EC3M 8UD Facsimile: 0845 357 6509

12.1.3 in the case of an Eligible Institution, to it at its registered office or such other address as the guarantor may agree with the Eligible Institution, or to the facsimile number provided by the Eligible Institution to the Guarantor for the purposes of this Rule.

12.2 Any communication under or in connection with these Rules or the Guarantee to be made by the Guarantor to a Beneficiary shall be made in such manner as the Guarantor, in its exclusive and absolute discretion, decides is the most appropriate manner in the circumstances at the time.

12.3 Communications under Rule 12.1 shall be deemed to take effect, if sent by facsimile, at the time of despatch or, if delivered by hand, at the time of actual delivery.

13. Changes to Rules

13.1 The Guarantor may amend or supplement those Rules at any time in its exclusive and absolute discretion.

13.2 The Guarantor shall publish details of any such amendment or supplement in accordance with Rule 8.3.5.