(1) The Companies Act 1989 is amended as follows.

(2) In paragraph (c) of section 154 (introduction), after "such transactions" insert "or as default fund contribution,".

(3) In section 155 (market contracts) -

(a) in subsection (2) [Section 155(2) and (2A) were substituted for subsection (2) by S.I. 1991/880. Subsection (2)(b) was amended by S.I. 1998/1748.], at the end of paragraph (a) omit "and" and for paragraph (b) substitute -

"(b) contracts entered into by the exchange, in its capacity as such, with a member of the exchange or with a recognised clearing house or with another recognised investment exchange for the purpose of enabling the rights and liabilities of that member or clearing house or other investment exchange under a transaction to be settled; and

(c) contracts entered into by the exchange with a member of the exchange or with a recognised clearing house or with another recognised investment exchange for the purpose of providing central counterparty clearing services to that member or clearing house or other investment exchange.";

(b) for subsection (2A), substitute -

"(2A) Where the exchange in question is a recognised overseas investment exchange, this Part does not apply to a contract that falls within paragraph (a) of subsection (2) (unless it also falls within subsection (3)).";