# The Friendly Societies (Insurance Business) Regulations 1994, Regulation 30: Derivative contracts


(1) Subject to paragraph (2) below, the value of rights under a derivative contract to which this regulation applies shall be—
(a) in the case of a listed derivative contract, the amount which would reasonably be paid by way of consideration for an immediate transfer or assignment thereof; or
(b) in the case of an unlisted derivative contract which the society—
(i) has entered into with an approved counterparty; and
(ii) reasonably believes may be readily closed out by entering into a further approved derivative contract with an approved counterparty,
the amount which would reasonably be paid by way of consideration for closing out that contract.
(2) There shall be deducted from the amount calculated in accordance with paragraph (1) above the amount of any cash or other assets as shall at the relevant date have been paid or transferred to the society in respect of that contract.
(3) This regulation applies to an approved derivative contract—
(a) which is held for the purposes of reduction of investment risks or efficient portfolio management, and which—
(i) is held in connection with assets to which this Part of these Regulations applies for such purposes; or
(ii) has the equivalent effect to such a contract held in connection with such assets for such purposes; and
(b) in respect of which, having regard to its assets and liabilities, the society will have, so far as can reasonably be foreseen and (if applicable) in the appropriate fund maintained by it, assets at the settlement date which match its obligations under that contract and from which it will fulfil those obligations.
(4) In this regulation “approved derivative contract” means a contract entered into by a society to which section 37(2) or (3) of the 1992 Act applies and which is—
(a) a contract for differences under which the amount payable by either party is calculated by reference to fluctuations in the value of—
(i) an asset for the valuation of which provision is made in this Part of these Regulations; or
(ii) income from such an asset; or
(iii) an index of such assets, or income therefrom, the value of which is determined on the basis of an arithmetic average of the value of the assets which comprise the index; or
(iv) an index in respect of which a derivative contract is listed; or
(b) a futures contract or an option, in each case providing for the acquisition or disposal of assets for the valuation of which provision is made in this Part of these Regulations.

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Source: https://www.legislation.gov.uk/uksi/1994/1981/regulation/30 (the official version)
Page: https://openlegislation.uk/friendly-societies-insurance-business-regulations-1994/regulation-30
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.