(1) This regulation applies to an arrangement between 2 persons ( person 1 and person 2 ) made in the following circumstances:
(a) person 1 enters into the arrangement in order to meet a requirement of another arrangement between person 1 and a person other than person 2 ( person 3 );
(b) under the arrangement, person 2 undertakes to make a payment to, or perform an obligation for the benefit of, person 3 in circumstances specified as part of the arrangement;
(c) under the arrangement, person 1 is liable to person 2 for any payments made, or liabilities, costs or expenses incurred, by person 2 in making the payment to, or performing the obligation for the benefit of, person 3;
(d) the arrangement does not constitute a financial product under section 764A of the Act, other than a derivative.
(2) For paragraph 765A(1)(y) of the Act, the arrangement is not a financial product.