PART 2EXCLUDED ACTIVITIES AND EXCEPTIONS

Derivatives: forward contracts and swaps10

1

The requirements listed in this article are that the transaction is—

a

a currency swap,

b

an interest rate swap, or

c

a forward contract relating to currencies or commodities, where the relevant contract specifies—

i

the description and amount of the currency or commodity concerned;

ii

the date when delivery will be made or when settlement will be made in cash; and

iii

the exchange rate or commodity price which will apply.

2

For the purposes of this article—

a

“currency swap” means a transaction under which—

i

one person (“A”) agrees with another person (“B”) that A will at a specified date pay to B a specified amount in one specified currency, and B will pay A that amount in another specified currency, calculated by reference to a specified exchange rate, and

ii

the amount concerned may consist of a specified principal amount and interest calculated at a specified fixed or floating rate;

b

“forward contract” means a contract for the sale of a commodity, currency or property of any description (including futures, whether or not traded on an exchange or trading venue) under which delivery is to be made at a future date and at a price agreed on when the contract is made;

c

“interest rate swap” means a transaction under which—

i

one person (“A”) agrees with another person (“B”) that A is liable to pay to B an amount equal to interest calculated by reference to an interest rate on a specified notional sum over a specified period, and that B is liable to pay to A an amount equal to interest calculated by reference to a different interest rate on that notional sum, and

ii

the interest rates in question are either specified (in the case of a fixed interest rate), or determined in relation to a specified reference rate (in the case of a floating interest rate);

d

“reference rate” means a foreign exchange or interest rate which is offered on an inter-bank market, or which is set out in an index published by any person who is not one of the parties to the contract;

e

“specified” means specified in the transaction agreement.