ECB hedging requirement: borrowers must fully hedge principal and coupon from liability creation, with at least one-year tenor and rollover. ECB borrowers must cover principal and coupon through financial hedges where mandated, with hedges starting when the liability is created and maintained to ensure continuous coverage. A minimum one-year tenor for hedges is required with periodic rollovers to avoid any unhedged exposure. Natural hedge is acceptable only to the extent of matching projected inflows in the same currency within the same accounting year, net of outflows; revenue-indexing arrangements do not qualify. Designated authorised dealer banks must verify compliance and update Master Direction procedures.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
ECB hedging requirement: borrowers must fully hedge principal and coupon from liability creation, with at least one-year tenor and rollover.
ECB borrowers must cover principal and coupon through financial hedges where mandated, with hedges starting when the liability is created and maintained to ensure continuous coverage. A minimum one-year tenor for hedges is required with periodic rollovers to avoid any unhedged exposure. Natural hedge is acceptable only to the extent of matching projected inflows in the same currency within the same accounting year, net of outflows; revenue-indexing arrangements do not qualify. Designated authorised dealer banks must verify compliance and update Master Direction procedures.
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