Regulation 13

the merchant bank, or the merchant bank’s agent, at the request of the customer and for the purposes of financing the procurement and the use or purchase, or both, of an asset by the customer, commissions the customer to construct the asset in accordance with the customer’s specifications for an amount of money (the purchase price);

contemporaneously with the commissioning mentioned in sub‑paragraph (a) —

the merchant bank, or the merchant bank’s agent, and the customer enter into an arrangement prescribed under regulation 10 where the asset is not in existence at the time the asset is leased to the customer (the lease arrangement); or

the customer gives an undertaking to the merchant bank, or the merchant bank’s agent, to purchase the asset from the merchant bank, or the merchant bank’s agent, immediately after the transfer of the ownership of the asset to the merchant bank, or the merchant bank’s agent, by the customer under sub‑paragraph (e)(i) (the purchase undertaking);

the customer procures the construction of the asset by a third party;

the merchant bank, or the merchant bank’s agent, makes payment of the purchase price to the customer on a periodic basis (the progress payment);

one of the following takes place:

the customer transfers the ownership of the asset to the merchant bank, or the merchant bank’s agent, on a mutually agreed date on or after the completion of the construction of the asset by the third party;

the customer refunds all progress payments to the merchant bank, or the merchant bank’s agent, and the lease arrangement or the purchase undertaking (as the case may be) is cancelled;

the merchant bank, or the merchant bank’s agent, agrees to the substitution of the asset that is the subject of the lease arrangement or the purchase undertaking with a comparable asset, and the customer transfers the ownership of the comparable asset to the merchant bank, or the merchant bank’s agent, on a mutually agreed date;

the merchant bank, or the merchant bank’s agent, does not take physical delivery of the asset or the comparable asset;

at the end of the arrangement, the merchant bank, or the merchant bank’s agent, transfers ownership of the asset, or of the comparable asset, to the customer pursuant to the lease arrangement or the purchase undertaking, except in the circumstances mentioned in sub‑paragraph (e)(ii);

the amount payable by the customer for the asset, or the comparable asset, is greater than the purchase price, and the difference between the total amount payable and the purchase price is the profit or return to the merchant bank for providing such financing to the customer;

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

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

commencement of the business within 14 days after the date of its commencement.