# The Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014, Article 10: Derivatives: forward contracts and swaps


(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.

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Source: https://www.legislation.gov.uk/ukdsi/2014/9780111117101/article/10 (the official version)
Page: https://openlegislation.uk/draft-financial-services-and-markets-act-2000-excluded-activities-and-prohibitions-order-2014/article-10
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.