(This note is not part of the Regulations)
These Regulations amend the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 (SI 2004/3256, as amended by SI 2005/2012, 2005/3374, 2006/843, 2006/936 and 2006/3236: “the Principal Regulations”) which allow certain profits and losses from loan relationships and derivative contracts to be left out of account, to be brought into account in a different way or to be brought into account at a later date.
Regulation 1 provides for citation, commencement and effect. The amendment made by regulation 5(2) does not have effect in relation to a debtor relationship to which a company ceased to be party before these Regulations came into force.
Regulation 2 introduces the amendments to the Principal Regulations.
Regulation 3 amends regulation 4A (relevant value) to extend the effect of this regulation to all accounting periods beginning on or after 1st January 2005.
Regulation 4 amends regulation 5 (regulations 3 and 4: supplementary) to correct a cross reference.
Regulation 5 amends regulation 6 (rules about fair value profits and losses). These amendments preclude an election under paragraph (3) or (5) where an election has been made under paragraph (3A) or (5B), clarify the consequences of an election under paragraph (5A) and amend a cross-reference consequential to the amendments made by SI 2005/2012.
Regulations 6 amends regulation 12 (profits and losses arising from loan relationships with embedded derivatives) in relation to loan relationships to which section 92A of the Finance Act 1996 (c 8) (convertible securities etc: debtor relationships) applied immediately before the start of the first accounting period of a company to begin on or after 1st January 2005 to widen the description of debits to be disregarded and makes provision for excluded amounts to be brought into account.
A full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.
Financial Services & Activities95
Banking & Finance Law95