2

An interest in shares is an exempt security interest for the purposes of subsection (1)(c) if the condition mentioned in subsection (2A) is satisfied and it is held by—

a

a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits;

b

an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act;

c

a person authorised under the law of a member State other than the United Kingdom to accept deposits who—

i

would not qualify for authorisation under paragraph 12 of Schedule 3 to that Act; and

ii

would require permission under another provision of that Act to accept such deposits in the United Kingdom;

d

an authorised insurance undertaking;

e

a person authorised under the law of a member State to deal in securities or derivatives, who deals in securities or derivatives on a relevant stock exchange or a relevant investment exchange, whether as a member or otherwise;

f

a relevant stock exchange;

g

a relevant investment exchange;

h

a recognised clearing house;

i

the Bank of England; or

j

the central bank of a member State other than the United Kingdom.

2A

The condition is that the interest in the shares must be held by way of security only for the purposes of a transaction entered into in the ordinary course of his or its business as a person or other body falling within any of paragraphs (a) to (j) of subsection (2).

2B

Paragraphs (a) to (c) of subsection (2) must be read with—

a

section 22 of the Financial Services and Markets Act 2000;

b

any relevant order under that section; and

c

Schedule 2 to that Act.

2C

But paragraph (a) of subsection (2) does not include—

a

a building society incorporated, or deemed to be incorporated, under the Building Societies Act 1986; or

b

a credit union, within the meaning of the Credit Unions Act 1979 of the Credit Unions (Northern Ireland) Order 1985.