Paragraph 15

(1)

For the purposes of this Schedule, “permitted derivative contract” means a derivative contract which—

(a)

is covered and—

(i)

is held in connection with property of the type described in paragraph 15(2) below for the purposes of reduction of investment risks or efficient portfolio management; or

(ii)

has the effect of a permitted derivative contract held in connection with such property for such purposes; and

(b)

satisfies the conditions in regulation 30(6) to (8) above except that for this purpose the references in regulation 30 to “an asset for the valuation of which provision is made in this Part of these Regulations” shall be construed as a reference to permitted connected property.

(2)

The property described in this paragraph is either—

(a)

permitted connected property, not being a contract or asset having the effect of a derivative contract; or

(b)

a permitted derivative contract or a contract or asset having the effect of a permitted derivative contract either of which when taken together with the permitted derivative contract mentioned first in paragraph 15(1) above has the effect that the society holds either permitted connected property or a permitted derivative contract in connection with such property.

(3)

For the purposes of this paragraph—

(a)

a derivative contract shall be deemed to be covered if it would not require a significant provision (within the meaning of regulation 30(4)) to be made in respect of it pursuant to regulation 36 of these Regulations if it were a derivative contract to which Part IV of these Regulations applied; and

(b)

“permitted connected property” means property of any of the descriptions in paragraphs 1 to 8 or 10 above and which is not property falling within paragraph 17(a) to (d) below.