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Article 54 of Directive 2009/65/EC permits competent authorities to authorise UCITS to invest up to 100% of their assets in transferable securities issued by certain issuers e.g. sovereigns. In such cases the UCITS must hold securities from at least six different issues and securities from any single issue shall not exceed 30% of its total assets.
Should this diversification rule apply on the basis of the net assets of the UCITS or on a gross basis?

Could UCITS using the VaR approach to calculate global exposure disclose leverage based on the Commitment Approach?

For UCITS using VaR to calculate global exposure, can the required disclosure of leverage be made on a net basis i.e. leverage calculated after netting/hedging arrangements are taken into account?

When calculating the global exposure according to the Commitment Approach, can UCITS that invest in other funds make use of hedging arrangements?

Can the following strategy be qualified as a hedging strategy as defined in CESR’s guidelines?

A portfolio management practice which aims to reduce the credit risk of a corporate or government bond portfolio through purchased Credit Default Swaps (CDS). Note that in this case the portfolio interest rate risk would remain un-hedged.