PART III SPECIFIED INVESTMENTS

Options83.

F1(1)

Options to acquire or dispose of—

(a)

a security or contractually based investment (other than one of a kind specified by this article);

(b)

currency of the United Kingdom or any other country or territory;

(c)

palladium, platinum, gold or silver; F2...

(d)

an option to acquire or dispose of an investment of the kind specified by this article by virtue of paragraph (a), (b) or (c)F3;

(e)

subject to paragraph (4), an option to acquire or dispose of an option to which F4paragraph 5, 6, 7 or 10 of Part 1 of Schedule 2 F5...applies.

F6(2)

Subject to paragraph (4), options—

(a)

to which paragraph (1) does not apply;

(b)

which relate to commodities;

(c)

which may be settled physically; and

(d)

either—

(i)

to which paragraph 5 or 6 of F7... Part 1 of Schedule 2 F8..., applies, or

(ii)

which in accordance with F9paragraphs 5, 6 and 8 of Part 2 of Schedule 2 are to be considered as having the characteristics of other derivative financial instruments and not being for commercial purposes, and to which paragraph 7 of F10Part 1 of that Schedule applies.

(3)

Subject to paragraph (4), options—

(a)

to which paragraph (1) does not apply;

(b)

which may be settled physically; and

(c)

to which paragraph 10 of F11Part 1 of Schedule 2 F12... applies.

(4)

Paragraphs (1)(e), (2) and (3) only apply to options in relation to which—

F13(a)

an investment firm or qualifying credit institution is providing or performing investment services and activities on a professional basis,

(b)

a management company which has a Part 4A permission to do so is providing the investment service specified in paragraph 4 or 5 of Part 3 of Schedule 2 or the ancillary service specified in paragraph 1 of Part 3A of that Schedule,

(c)

a market operator is providing the investment service specified in paragraph 8 or 9 of Part 3 of that Schedule, or

(d)

a full-scope UK AIFM which has a Part 4A permission to do so is providing the investment service specified in paragraph 1, 4 or 5 of Part 3 of that Schedule or the ancillary service specified in paragraph 1 of Part 3A of that Schedule.

F14(5)

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