ESMA_QA_1954
29/01/2013
Subject Matter
Uncovered Credit Default Swap - Static hedging through the holding of a sovereign bond
Original question
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?
ESMA Answer
29-01-2013
Original language
[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.
Status: Answer Published
Additional Information
Level 1 Regulation
Short Selling Regulation (SSR) Regulation (EU) No 236/2012
Topic
Other SSR-related topics