2.1. Issue of Uncertificated Investments

Subject to rule 2.3 (Conditions for issue of Uncertificated Investments and dematerialisation), if an Issuer of Investments permits the issue, registration and transfer of the Investments in Uncertificated form, the Investments may be issued in Uncertificated form in accordance with these Rules.

2.2. Dematerialisation of Investments

Subject to rule 2.3 (Conditions for issue of Uncertificated Investments and dematerialisation), if an Issuer permits the registration and transfer of a class of its existing Certificated Investments in Uncertificated form, the Investments may be converted from Certificated form into Uncertificated form in accordance with these Rules.

2.3. Conditions for issue of Uncertificated Investments and dematerialisation

2.3.1 The Issuer of an Investment must not permit the holding of, or transfer of title to, the Investment in Uncertificated form if the law under which the Investment or the Issuer is constituted, or the Terms of Issue, are in any respect inconsistent with:

1. (a) the issue of the Investment in Uncertificated form; or
2. (b) the registration or transfer of title to the Investment in Uncertificated form; or
3. (c) these Rules.

2.3.2 If Investments are issued in or converted into Uncertificated form, all Investments of the relevant class must be held in Uncertificated form. However, this subrule does not limit the right of the Issuer subsequently to convert Uncertificated Investments to Certificated form under Part 5 (Rematerialisation).

2.3.3 Bearer Investments must not be converted into Uncertificated form.

2.4. Procedure for dematerialisation of Investments

2.4.1 Before an Issuer converts Investments into Uncertificated form, the Issuer must:

• (a) if the Issuer is a Company—obtain the consent of the majority of the holders of the existing Investments that the Issuer proposes to convert into Uncertificated form; and
• (b) comply with any other requirements of applicable AIFC Regulations or AIFC Rules and the Terms of Issue applicable to the Issuer or the Investments relating to the conversion of the Investments into Uncertificated form.

2.4.2 The conversion of Investments into Uncertificated form is effective when the requirements of subrule 2.4.1 are satisfied or, if the Issuer sets a later time, at that time.

2.4.3 If the Issuer of Investments that are converted into Uncertificated form is a Company or Recognised Company, the Issuer must. on the day of the conversion, notify:

• (a) each holder of the Investments in Writing of the conversion of the Investments into Uncertificated form and the date of the conversion; and
• (b) the Registrar of Companies in the form required by the Registrar.

2.4.4 On receiving the notification under subrule 2.4.3, the Registrar of Companies must note the conversion of the Investments into Uncertificated form, and the date of the conversion, on the relevant register kept by the Registrar under the AIFC Companies Regulations.

2.4.5 To remove any doubt, these Rules do not prevent the conversion of Certificated Investments, which have previously been converted from Uncertificated form into Certificated form, back into Uncertificated form.