For section 89(3) of the Finance Act 1986 there shall be substituted the following subsection—

“(3)

For the purposes of this section a person is a market maker in securities of a particular kind—

(a)

if he—

(i)

holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities of that kind at a price specified by him, and

(ii)

is recognised as doing so by the Council of The Stock Exchange; or

(b)

if—

(i)

he is an authorised person under Chapter III of Part I of the Financial Services Act 1986,

(ii)

he makes the agreement in the course of his business as a dealer in investments, within the meaning of paragraph 12 of Schedule 1 to the Financial Services Act 1986, as a principal and in circumstances where that paragraph is applicable for the purposes of that Act,

(iii)

he does not make the agreement in the course of any activities which fall within paragraph 14 or 16 of Schedule 1 to the Financial Services Act 1986, and

(iv)

the securities are not at the time the agreement is made dealt in on a recognised investment exchange within the meaning of the Financial Services Act 1986.”.