PART IIRESTRICTIONS ON EMPLOYER-RELATED INVESTMENTS

Loans that become employer-related8

1

If either a loan or a security falling within paragraph 2 of Schedule 1 to the Financial Services Act 1986 becomes an employer-related loan on or after the commencement date as a result of a change in the ownership of the employer or the person to whom the loan was made, the loan or security may be retained until whichever is the latest of—

a

the date falling two years after the date on which it became an employer-related loan;

b

the 6th April 2002; or

c

where repayment cannot by virtue of contractual or other legal obligations be required or, in the case of securities, disinvestment effected before the latest of the dates mentioned in sub-paragraphs (a) and (b), the earliest date on which repayment can be enforced, or disinvestment effected.

2

In paragraph (1)—

a

“loan” does not include any sum regarded as a loan under section 40(3) of the 1995 Act; and

b

“retained” means left undischarged.