Paragraph 6 Paragraphs 7 and 10 of Part 1: exclusion of certain energy contractsF1F2
Where both the conditions in sub-paragraph (2) are met, a contract is to be treated—
for the purposes of paragraph 7 of Part 1 of this Schedule, and of paragraph 5(1)(b) of this Part of this Schedule, as being for commercial purposes, and
for the purposes of paragraphs 7 and 10 of Part 1 of this Schedule, as not having the characteristics of other derivative financial instruments.
Those conditions are—
that the contract is entered into with or by an operator or administrator of an energy transmission grid, energy balancing mechanism or pipeline network, and
that it is necessary to keep in balance the supplies and uses of energy at a given time, including the case when the reserve capacity contracted by an electricity transmission system operator is being transferred from one prequalified balancing service provider to another prequalified balancing service provider with the consent of the relevant transmission system operator.
In sub-paragraph (2)(b), “balancing service provider” has the meaning given in Article 2 of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity.
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)