Section 257LC | The no risk avoidance requirement

(1)There must not at any time in the shorter applicable period be any arrangements in existence the main purpose or one of the main purposes of which is (by means of any insurance, indemnity, guarantee, hedging of risk or otherwise) to provide partial or complete protection for the investor against what would otherwise be the risks attached to making the investment.

(2)The arrangements referred to in subsection (1) do not include any arrangements which are confined to the provision—

(a)for the social enterprise itself, or

(b)if the social enterprise is a parent company that meets the trading requirement in section 257MJ(2)(c) or is a parent company that is an accredited social impact contractor—

(i)for the social enterprise itself,

(ii)for the social enterprise itself and one or more of its subsidiaries, or

(iii)for one or more of the subsidiaries of the social enterprise,

of any such protection against the risks arising in the course of carrying on its business as might reasonably be expected to be provided in normal commercial circumstances.