Paragraph 5 Paragraph 7 of Part 1: treatment of certain derivative financial instrumentsF1F2
This paragraph has effect for the purposes of paragraph 7 of Part 1 of this Schedule, except in the case of—
a spot contract as defined in sub-paragraph (3), or
a contract which is for commercial purposes as provided by paragraph 6 of this Part of this Schedule.
A contract is to be considered as having the characteristics of other derivative financial instruments where it satisfies both the following conditions—
it meets one of the following criteria—
it is traded on a trading venue other than a UK trading venue (“an overseas trading venue”),
it is expressly stated to be traded on, or is subject to the rules of, a UK regulated market, a UK MTF, a UK OTF or an overseas trading venue, or
it is equivalent to a contract traded on a UK regulated market, a UK MTF, a UK OTF or an overseas trading venue, with regards to the price, the lot, the delivery date and other contractual terms;
it is standardised so that the price, the lot and the delivery date are determined principally by reference to regularly published prices, standard lots or standard delivery dates.
For the purposes of sub-paragraph (1)(a), a spot contract is a contract for the sale of a commodity, asset or right, under the terms of which delivery is scheduled to be made within the longer of the following periods—
2 trading days;
the period generally accepted in the market for that commodity, asset or right as the standard delivery period.
A contract is not to be considered a spot contract where, irrespective of its explicit terms, there is an understanding between the parties to the contract that delivery of the commodity, asset or right is to be postponed and not to be performed within the period referred to in sub-paragraph (3).
Annotations
Textual amendments
- F1
Sch. 2 substituted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 29
- F2
Sch. 2 Pt. 2 substituted (23.10.2025) by The Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025 (S.I. 2025/1020), regs. 1(2), 7(2) (with reg. 17); S.I. 2025/1078, reg. 2(b) (with reg. 11)
Notes on Schedule 2
Textual amendments
- F2
Sch. 2 heading substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 4(2) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)