1. By way of derogation from Article 32 and subject to the conditions set out in paragraphs 2 to 4 of this Article, Member States shall permit or require in respect of all companies or any classes of companies valuation at fair value of financial instruments, including derivatives.
Such permission or requirement may be restricted to consolidated accounts as defined in Directive 83/349/EEC.
2. For the purpose of this Directive commodity-based contracts that give either contracting party the right to settle in cash or some other financial instrument shall be considered to be derivative financial instruments, except when:
(a) they were entered into and continue to meet the company's expected purchase, sale or usage requirements;
(b) they were designated for such purpose at their inception; and
(c) they are expected to be settled by delivery of the commodity.
3. Paragraph 1 shall apply only to liabilities that are:
(a) held as part of a trading portfolio; or
(b) derivative financial i