Tuesday 29 October 2019

UK: England and Wales: issuer liability and dematerialised shares

Judgment was given yesterday by Mr Justice Hildyard in SL Claimants v Tesco Plc [2019] EWHC 2858 (Ch) in a first instance decision that will nevertheless be regarded as a leading authority on issuer liability towards those holding shares in dematerialised form. The case concerned claims against Tesco under section 90A ("Liability of issuers in connection with published information") and schedule 10A of the Financial Services and Markets Act 2000. The claimants had never directly acquired, held or disposed of a legal interest in the shares: the shares were, instead, held in dematerialised form through CREST using custodians and sub-custodians. Tesco sought to strike-out the claims, arguing that it could not be liable to the claimants under section 90A because (to put matters very generally) of their position in the custody chain. Tesco's arguments were rejected.

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