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Chapter CG54160

Document Cited authorities 1 Cited in Related
Vincent
Published date12 March 2016
Record NumberCG54160

This guidance relates to the interaction of the CG code with the regime for derivative contracts of companies introduced by FA2002 for accounting periods beginning on or after 1 October 2002.

Derivative contracts are contracts used to manage risk of exposure to fluctuations in, for example, interest rates or exchange rates.

Interest rate instruments include swaps, caps, floors, forward rate agreements and options to enter into those agreements.

Exchange rate instruments include forward currency contracts, including currency swaps, and options to enter into these contracts.

For accounting periods beginning before 1 October 2002, derivative contracts used by companies to minimise exposure to interest rate or exchange rate fluctuations, were within the regime for Financial Instruments (CG44000).

FA2002 replaced the Financial Instruments regime with the Derivative Contracts regime (in FA2002/SCH26) and extended it to cover all derivative contracts except those specifically excluded. Guidance to determine whether a derivative is excluded from the derivative contracts regime is at CFM13220+.

Derivative contracts which are not specifically excluded are wholly within the income regime for derivative contract...

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