Qualified exclusion: embedded derivatives whose underlying subject matter is shares5A

1

Paragraph 4 does not prevent a relevant contract to which this paragraph applies from being a derivative contract.

2

This paragraph applies to a relevant contract of a company if—

a

it is a deemed relevant contract to which the company is treated as party under section 94A(2)(b) of the Finance Act 1996,

b

its underlying subject matter consists, or is treated as consisting, wholly of shares in a company, and

c

the company is party as a creditor to the host contract under section 94A(2)(a) of that Act.

3

Paragraph 9 applies for the purpose of determining whether the underlying subject matter of a relevant contract is to be treated as consisting wholly of shares in a company.