Article 15(2)(a) of the DR provides that “where the exposure being hedged relates to the Union or the Member States which have the euro as their currency, it shall be permissible to hedge it with an appropriate European or Euro area index of sovereign bond credit default swaps”. In cases where such indices are used, is it necessary to undertake a look through assessment of correlation and proportionality be to each underlying long position and reference obligation that underlies the index being used?

Can a sovereign CDS position be used to hedge against the risk not only of default in respect of an exposure but also against the risk of credit spreads widening e.g. by maintaining different durations in static or dynamic hedges to hedge against spread widening risk?

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?

Is it legitimate for an investor to hedge a risk through a CDS position which is either longer or shorter in duration than the term of the asset/liability being hedged? As examples, could a 12 year sovereign bond be hedged by 5 year sovereign CDS contract which was then rolled until the maturity date for the bond or a 2 year bond be hedged with a 5 year sovereign CDS contract?

Under Article 6 of the ITS, if the intention is to execute a short sale and cover intra-day, a locate and easy to borrow confirmation is sufficient provided that the broker is informed that the short sale will be covered by purchases during the same day as the short sale takes place. However, if a put on hold confirmation is sought (even if not strictly required for liquid shares), is there still a requirement to provide a same-day request for confirmation to the third-party that the short sale will be covered by purchases during the same day?