ESMA_QA_1952

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1952

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Regulatory Context

Regulation : SSR

Level 1 Regulation: Short Selling Regulation (SSR) Regulation (EU) No 236/2012

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Other SSR-related topics

Subject Matter: Uncovered Credit Default Swap - Using a sovereign CDS position to hedge the risk related to another CDS position

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Question

Submission Date: 13 September 2012

May a sovereign CDS be used to hedge the risk under another CDS referring to the same sovereign debt?

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ESMA Answer

Answer Date: 13-09-2012

[ESMA70-145-408 SSR Q&A, Q&A 11.2] Yes, it would be legitimate to use a sovereign CDS position to hedge a risk related to another CDS position in so far as the conditions prescribed in Chapter V (in particular Articles 18 and 19) of the DR (Commission Delegated Regulation No 918/2012) are fulfilled.

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This document was automatically extracted from the ESMA EMIR Q&A database.