ESMA_QA_1954

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1954

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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 - Static hedging through the holding of a sovereign bond

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Question

Submission Date: 29 January 2013

Should the holding of a sovereign bond be treated as a static or dynamic hedge for the purposes of Articles 19 and 20 of the DR?

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ESMA Answer

Answer Date: 29-01-2013

[ESMA70-145-408 SSR Q&A, Q&A 11.4] Article 20(2) of the DR specifies that direct exposures to sovereign or public sector bodies in the sovereign are examples of static hedging. The holding of a sovereign bond should therefore be treated as a static hedge.

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