PART 3Restriction of Write-down Provision

Set-off and netting: meaning of “derivative”, “financial contract” and “qualifying master agreement”

14.—(1) In this Part—

(a)derivative” means a financial instrument referred to in paragraphs 4 to 10 of Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001(1);

(b)financial contract” means any or any combination of the following (other than a derivative)—

(i)a contract for the purchase, sale, transfer or loan of a transferrable security, a group of transferrable securities or index of transferrable securities;

(ii)a repurchase or reverse repurchase transaction on any transferable security, group of transferable securities or index of transferable securities;

(iii)a commodities contract of a financial nature, including—

(aa)a contract for the purchase, sale, transfer or loan of a commodity, a group of commodities or an index of commodities for future delivery;

(bb)a swap or option on a commodity, a group of commodities or an index of commodities;

(cc)a repurchase or reverse repurchase transaction on a commodity, a group of commodities or index of commodities;

(iv)a futures contract, including a contract (other than a commodities contract) for the purchase, sale or transfer of property of any description under which delivery is to be made at a future date and at a price agreed when the contract is made.

(2) In regulation 13 (set-off and netting), “qualifying master agreement” means a master agreement in so far as it relates to—

(a)a derivative;

(b)a financial contract; or

(c)a contract for the sale, purchase or delivery of the currency of the United Kingdom or any other country, territory or monetary union.

(1)

Amended in relevant part by S.I. 2006/3384, 2017/488 and 2018/1403.