Explanatory note

This Order provides for certain exemptions from the need to be authorised under the Financial Services Act 1986 (c. 60) (“the FS Act”) arising from the setting up by BG plc of a market to balance in-puts and off-takes of gas from its pipeline system. BG plc has, pursuant to the conditions of its public gas transporter licence, appointed ENMO Ltd to operate the market.

The preambles to the Order explain the framework within which the balancing market is established and make it clear that the exemption is granted on the understanding that the market will operate for the purpose of balancing the gas in the pipeline and that participants will be limited to gas shippers who will not use it for speculating in investments.

Article 3 of the Order carries forward the exemption previously conferred on BG plc by the Financial Services Act 1986 (Gas Industry Exemption) Order 1996 (S.I. 1996/498) and extends it to investments falling within paragraph 9 of Schedule 1 to the FS Act. Articles 4 and 5 exempt ENMO, BG plc and the gas shippers using the balancing market to the extent that they engage in certain investment business in the course of operating or participating in the market. Article 6 revokes the earlier Order.