2

For the purposes of this paragraph the excluded types of property are—

a

in relation to an option or future, intangible fixed assets; and

b

in relation to relevant contracts which satisfy the conditions specified in sub-paragraph (2A) or (2B)—

i

shares in a company, or

ii

rights of a unit holder under a unit trust scheme.

2A

The conditions specified in this sub-paragraph are—

a

the relevant contract is entered into by a company carrying on life assurance business;

b

the relevant contract is an approved derivative for the purposes of Rule 4.3.5 of the Integrated Prudential Sourcebook; and

c

there is a hedging relationship between the relevant contract and shares or rights of a unit holder under a unit trust scheme held by the company as assets of its long-term insurance fund.

2B

The conditions specified in this sub-paragraph are—

a

the relevant contract is entered into or acquired by a company otherwise than for the purposes of a trade carried on by it or the company is a mutual trading company, and

b

there is a hedging relationship between the contract and an asset of the company which consists of shares or rights of a unit holder under a unit trust scheme.