Regulation 23B

the bank, or the bank’s agent, purchases an asset at the request of a customer for an amount of money (the original price) for the purposes of financing the use or purchase, or both, of the asset by the customer;

the bank, or the bank’s agent, leases the asset to the customer;

in a case where the asset is not in existence at the time the bank, or the bank’s agent, leases the asset to the customer, an amount of money (the advance payment) may be paid by the customer to the bank, or the bank’s agent, for the subsequent use of the asset;

an amount of money (the rental) is paid by the customer to the bank, or the bank’s agent, for the lease of the asset;

the bank, or the bank’s agent, appoints the customer, or a third party, to take on the obligations in connection with the use of the asset, including its maintenance and insurance;

in the event of an early termination of the lease, the customer, or a third party, shall purchase the asset from the bank, or the bank’s agent, at a price determined at the start of the lease (the early termination price);

upon expiry of the lease —

where the aggregate of all rental and advance payments made under the lease is greater than the original price, the bank, or the bank’s agent, shall, whether with or without consideration, transfer the ownership of the asset to the customer or a third party;

where the aggregate of all rental and advance payments made under the lease is equal to or less than the original price, the customer or a third party shall purchase the asset from the bank, or the bank’s agent, at a sale price determined at the start of the lease (the sale price), which amount shall be consideration for the transfer of the asset;

the total amount payable by the customer and such third party referred to in either sub-paragraph (f) or (g), if any, for the asset comprising —

the advance payment;

the rental; and

the sale price or early termination price,is greater than the original price, and the difference between the total amount payable and original price is the profit or return to the bank for providing such financing to the customer;

the bank, or the bank’s agent, does not derive any gain or suffer any loss from any movement in the market value of the asset, including total loss of the asset, other than as part of the profit or return referred to in sub-paragraph (h).

intention to commence the business referred to in paragraph (1); or

commencement of such business within 14 days after the commencement of such business.