20 DECEMBER

NEW ZEALAND GAZETTE

6351

1. Explanation (which does not form part of the determination).

   (1) This determination applies where for the purpose of calculating the income or expenditure of a person in respect of a futures or option contract denominated in a foreign currency, it is necessary to determine the price of that contract.

   This determination sets out the approved markets, sources of information and method for determining the prices for futures and option contracts denominated in a foreign currency.

2. Reference—This determination is made pursuant to section 64E (1) of the Income Tax Act 1976.

3. Scope of Determination—This determination applies where, for the purpose of calculating the income or expenditure of a person in respect of futures or option contract traded in foreign markets, it is necessary to determine the price of the futures or option contract.

4. Principle—(1) Markets are approved having regard to the following criteria—

   (a) The number of participants in the market or having access to the market:

   (b) Frequency of trading in the market:

   (c) The nature of trading in the market—how the price is determined and how the financial assets are traded on the market:

   (d) The potential or demonstrated capacity of a person or group of persons to significantly influence the market:

   (e) Significant barriers to entry:

   (f) Discrimination on the basis of the quantity bought and sold unless based on the risks involved or the transaction costs or economies of scale.

   (2) Sources of information are approved having regard to the following criteria—

   (a) Reliance on the sources of information by the market:

   (b) The accessibility of the sources of information by participants in the market.

   (3) A method of obtaining a price for a futures or option contract is approved if it is determined by an independent source and is adopted by the participants of the market.

5. Interpretation—(1) In this determination, unless the context otherwise requires—

   Expressions used, except the expression “income year”, have the same meanings as in the Act and where a word or expression is given a particular meaning for the purposes of sections 64B to 64M of the Act it shall have the same meaning as in the said sections 64B to 64M;

   “The Act” means the Income Tax Act 1976;

   “Futures contract” means a contract traded on a futures market outside New Zealand;

   “Option contract” means a contract traded on an organised and regulated option market outside New Zealand;

   “Multicontributor page” means a multicontributor page of information that is displayed on a screen provided by—

   (a) Reuters New Zealand Limited; or

   (b) Telrate New Zealand Limited—

   or any firm that is associated with either of those firms and provides similar services;

   “Income year means—

   (a) Where a taxpayer furnishes a return of income under section 15 of the Income Tax Act 1976 for an accounting year ending with an annual balance date other than the 31st day of March, the period commencing on the day after the end of the immediately preceding accounting year and ending on that balance date:

   (b) In respect of the income of any other person, the year in which that income has been derived by that person.

   (2) Any reference in this determination to another determination made by the Commissioner shall be construed as including a reference to any fresh determination made by the Commissioner to vary, rescind, restrict, or extend that determination.

6. Method—(1) The following futures and option markets are approved:

   • New York Commodities Exchange

     • Gold Futures contract
     • Silver Futures contract
     • Copper Futures contract
     • Gold Option contract
     • Silver Option contract
     • Copper Option contract

   • New York Mercantile Exchange

     • Heating Oil Futures contract
     • Gasoline Futures contract
     • Crude Oil Futures contract

   • New York Coffee, Sugar, Cocoa Exchange

     • Coffee Futures contract
     • Sugar Futures contract
     • Cocoa Futures contract

   • New York Futures Exchange

     • NYSE Composite Stock Index Futures contract

   • New York Cotton Exchange

     • Cotton Futures contract

   • Chicago Board of Trade

     • US Treasury Note (5 year) Futures contract
     • US Treasury Bonds (15 year) Futures contract
     • Gold Futures contract
     • Silver Futures contract
     • Wheat Futures contract
     • Corn Futures contract
     • Soybean Futures contract
     • Soybean Oil Futures contract
     • Soybean Meal Futures contract
     • Oats Futures contract
     • US Treasury Notes (5 year) Option contract
     • US Treasury Bonds (15 year) Option contract
     • Silver Option contract
     • Wheat Option contract
     • Corn Option contract
     • Soybean Option contract

   • Chicago Mercantile Exchange

     • Gold Futures contract
     • S & P 500 Stock Index Futures contract
     • Eurodollars Futures contract
     • US Treasury Bills (90 day) Futures contract
     • Swiss Francs Futures contract
     • Australian Dollars Futures contract
     • Deutschmark Futures contract
     • Canadian Dollars Futures contract
     • British Pounds Futures contract
     • Japanese Yen Futures contract
     • French Franc Futures contract
     • Live Cattle Futures contract
     • Live Hogs Futures contract
     • Pork Bellies Futures contract
     • S & P 500 Stock Index Option contract
     • Eurodollars Option contract
     • US Treasury Bills (90 day) Option contract
     • Swiss Francs Option contract
     • Australian Dollar Option contract
     • Deutschmark Option contract
     • British Pounds Option contract
     • Japanese Yen Option contract
     • Canadian Dollars Option contract

   • London International Financial Futures Exchange