Part 7Derivative contracts
Chapter 2Contracts to which this Part applies
Meaning of “derivative contract” and other basic definitions
582“Contract for differences”
(1)
In this Part “contract for differences” means a contract the purpose or pretended purpose of which is to make a profit or avoid a loss by reference to fluctuations in—
(a)
the value or price of property described in the contract, or
(b)
an index or other factor designated in the contract.
F1and includes a contract which falls within section 6(2) of, or paragraph 1(1) of Schedule 2 to, the Energy Act 2013.
(2)
But none of the following is a contract for differences—
(a)
an option,
(b)
a future,
(c)
a contract of insurance,
(d)
a capital redemption policy,
(e)
a contract of indemnity,
(f)
a guarantee,
(g)
a warranty, or
(h)
a loan relationship.
(3)
For the purposes of subsection (1)(b), an index or factor may be determined by reference to any matter.