10(1)After paragraph 38 insert—U.K.
“38A(1)Liabilities are excluded if they represent cash collateral provided as QCP margin in relation to a trade executed or to be executed under a client clearing agreement.
(2)Cash collateral is provided as “QCP margin” if, and to the extent that—
(a)it exceeds the fair value of the instrument to which the trade relates, and
(b)it corresponds to either—
(i)an asset held in respect of the qualifying central counterparty which represents cash collateral provided to that qualifying central counterparty, or
(ii)cash collateral provided to the qualifying central counterparty which has the effect of reducing a liability of the clearing member to the qualifying central counterparty.
(3)In this paragraph—
“clearing member”, in relation to a recognised central counterparty, has the meaning given by Article 2(14) of the EMIR Regulation,
“client” has the meaning given by Article 2(15) of the EMIR Regulation,
“client clearing agreement” means a contract between a clearing member of a qualifying central counterparty and a client, relating to the clearing of transactions with the qualifying central counterparty,
“derivative contract” has the meaning given by international accounting standards,
“the EMIR Regulation” means Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories,
“qualifying central counterparty” means a central counterparty that has been either authorised or recognised under the EMIR Regulation,
“trade” means a transaction relating to the sale and purchase of a financial instrument or to the entering into of a derivative contract.”
(2)The amendment made by this paragraph has effect in relation to chargeable periods ending on or after 1 January 2014.