"(2A) Subsection (1) above shall not apply in prescribed circumstances if—
(2) At the end of that section there shall be added—
(7) For the purposes of subsection (2A) above—
prescribed" means prescribed in regulations made by the Treasury;
recognised clearing house" means a recognised clearing house within the meaning of the Financial Services Act 1986;
recognised investment exchange" means a recognised investment exchange within the meaning of that Act.".'.— [Mr. Maude.]
I beg to move, That the clause be read a Second time.
The new clause addresses the issue of representations from the exchanges that we have just discussed. It has been put to us that the exemption for market makers under section 732(2), covering bond washing, will be too limited in the context of the operations of the new merged market.
The substantive point, of whether an extension should be made to the exemption for market makers to include London derivatives exchange dealers, is still under review. The new clause simply provides the enabling power for regulations to extend the exemption. That has to be done in this year's Finance Bill because it is intended that the LDE will be operational by the end of the year. The case for making the substantive change has yet to be made and considered. The taking of the powers does not imply a Government view at this stage on the desirability of extending the exemption. Parliament will have an opportunity in the normal way to scrutinise any regulations implementing any substantive change that we seek to make.