ESMA_QA_1952
13/09/2012
Subject Matter
Uncovered Credit Default Swap - Using a sovereign CDS position to hedge the risk related to another CDS position
Original question
May a sovereign CDS be used to hedge the risk under another CDS referring to the same sovereign debt?
ESMA Answer
13-09-2012
Original language
[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.
Status: Answer Published
Additional Information
Level 1 Regulation
Short Selling Regulation (SSR) Regulation (EU) No 236/2012
Topic
Other SSR-related topics